What Is Buildings Insurance and Do You Need It?
Buildings insurance is a type of home insurance that covers the cost of repairing or rebuilding your property if it’s damaged or destroyed. If you’re buying a home with a mortgage, it’s usually a condition of the loan – most lenders will not proceed unless you have suitable buildings cover in place.
This guide explains what buildings insurance is, what it usually covers, who needs it, and how to work out how much cover you require.
What Does Buildings Insurance Cover?
Buildings insurance protects the structure of your property – basically anything that forms part of the building itself. This normally includes:
- The walls, roof, floors and ceilings
- Permanent fixtures such as fitted kitchens and bathrooms
- Garages, sheds and fences
- Pipes, cables and drains
Your policy should cover the full cost of rebuilding your home from scratch, including:
- Demolition and site clearance
- Architects’ and surveyors’ fees
- Labour and materials
Most standard buildings insurance policies will cover loss or damage caused by:
- Fire and explosion
- Storms, floods and earthquakes
- Theft, attempted theft and vandalism
- Frozen and burst pipes
- Fallen trees, lampposts, aerials or satellite dishes
- Subsidence
- Vehicle or aircraft collisions
Always check your own policy wording, as cover and exclusions vary between insurers.
Why do I need Buildings Insurance?
If You Have a Mortgage
If you have a mortgage, buildings insurance is usually compulsory. You should insure for the full rebuild cost.
- Your lender should allow you to choose your own insurer, or offer you options.
- They can refuse an insurer of your choice, but only for valid reasons, such as if the policy does not provide adequate coverage. However, they cannot force you to use their own policy unless buildings insurance is built into the mortgage package.
When buying a property, it is a good idea to put buildings insurance in place from the point you exchange contracts, as that’s when you become legally responsible for the property.
If you’re selling, you remain responsible for the building until completion, therefore you should not cancel your insurance until the sale is final.
If your lender repossesses the property, you may still be responsible for insuring it until it is sold or the mortgage is repaid. You must tell your insurer that the property is no longer occupied, otherwise you may not be covered. Your lender may arrange insurance itself and charge you for the cost. You should check your mortgage and insurance policy terms for further details.
If You Don’t Have a Mortgage
If you own your home outright, buildings insurance isn’t required, but it is advisable. Consider how you would afford to rebuild your home if it were severely damaged or completely destroyed.
If You’re a Leaseholder
If you own a leasehold property (for example, a flat),:
- Freeholder may arrange a block policy for the building and recharge the cost to you through your service charges or
- As part of your lease agreement they can allow you to insure your property on your own. This second option is less common
Always check your lease and service charge breakdown so you know whether buildings cover is already included.
If You’re Renting
If you rent your home, your landlord is responsible for buildings insurance. However:
- You may still be responsible for damage to fixtures and fittings, depending on your tenancy agreement.
- Your own contents insurance may extend to accidental damage to the landlord’s fixtures and fittings – check your policy wording.
How Much Buildings Insurance Do You Need?
The amount of cover you choose is called the sum insured. This should be the full cost of completely rebuilding your home, not the price you paid for it or its current market value.
In most cases, rebuild costs are lower than the market value, so:
- Don’t over‑insure – you could pay higher premiums than necessary.
- Don’t under‑insure – this could invalidate cover or mean that part or all of a claim may not be paid.
Working Out the Rebuild Cost
To estimate the rebuild cost:
- You can use the Building Cost Information Service (BCIS) online calculator via the Association of British Insurers (ABI) website.
- Some insurers offer unlimited buildings cover, so you don’t have to calculate the rebuild cost yourself. However, if you know your rebuild cost, it may be cheaper to shop around for a policy that matches your exact needs.
- Some policies estimate the sum insured using general information about your location, property type, number of bedrooms and age. This might not be accurate for your specific home, so check whether the level of cover is enough.
You should review your sum insured regularly because rebuild costs tend to rise over time. Many insurers offer policies that automatically increase your cover in line with index‑linked rebuild costs.
If you improve or extend your home – for example, by adding an extension, converting the loft or fitting a high‑end kitchen – your rebuild cost may increase. Always let your insurer know about major changes so they can adjust your cover.
For properties with special features, such as thatched roofs or listed status, you may need a professional assessment. In these cases, you can pay for a survey from a member of the Royal Institution of Chartered Surveyors (RICS) to get an accurate rebuild cost.
Do I Need Extra Buildings Insurance?
Standard policies won’t cover every possible risk. Depending on where you live and the type of property you own, you may find that some of the risks including flood & subsidence cover that are usually included as standard may be either offered at an additional cost or excluded from the policy.
Some risks that are commonly included as standard are:
- Alternative accommodation if you have to move out while repairs are carried out after a claim
- Damage to underground pipes, cables, gas and electricity supplies
- Glass cover for windows, doors, conservatories and skylights
- Property owners’ liability
These may differ from one insurer to another. You should check the policy documentation for full details.
Some optional cover that you can purchase
- Accidental Damage to the building.
- Legal expenses cover
Key Things to Remember
- Buildings insurance protects the structure of your home and is usually required if you have a mortgage.
- Make sure your sum insured matches the full rebuild cost, not the market value.
- Review your cover regularly, especially after home improvements.
- Leaseholders and tenants should always check who is responsible for arranging buildings insurance.
- Consider extra cover if your home has special features or is in a higher‑risk area.
Frequently Asked Questions
Does building insurance cover subsidence?
Depending on the insurer subsidence is something that the policy can cover. It`s best to check with the insurance company before deciding to proceed with the cover.
Does home insurance cover buildings work?
In general, standard cover does not cover for significant structural building work, for example extensions, conversions. However, it may cover minor DIY and cosmetic works. For exact level of cover please check with your insurance company.
Does buildings insurance cover fallen trees?
Typically, buildings insurance cover may cover damage caused by a fallen tree. This all depends on the terms and conditions of the policy and the circumstances of the incident. If covered then this will include damage to the structure of the property under buildings cover and cover to personal belongings under contents insurance. However, claims may be affected if the insurer considers the damage to have arisen from negligence, so it`s important to check your individual policy wording.
Does buildings insurance cover natural disasters?
Standard insurance can provide cover for some natural events such as fire, storm, flood, earthquake, but the exact risks included and the level of cover available depend on the specific policy. Some events may be covered as standards while others may be limited or only available as optional extras. Please check with your insurance for more information.
Do I need to tell my insurance about building works at my property?
The short answer is Yes, especially if there is structural works. For more information please contact your insurance company.
