Jane Dotson
Whether you're a homeowner or a renter, it's important to consider the value of insurance. While it may not be a legal requirement to have building insurance, it is highly recommended. Building insurance covers the cost of repairing your home's structure in the event of damage caused by unforeseen events such as fires, floods, or storms. It also covers permanent fixtures, including sheds, garages, and greenhouses, as well as drains, cables, and pipes. The average cost of building insurance in the UK is around £120 per year, but this can vary depending on the property and the type of policy. Contents insurance, on the other hand, covers personal belongings and is typically added on top of building insurance. It's important to note that building insurance does not cover personal belongings, and renters may not need it as it is usually the landlord's responsibility.
| Characteristics | Values |
|---|---|
| Cost of building insurance | The average UK price is around £120 per year, but the price can vary from property to property and year to year. A single policy costs £209 on average. |
| Cost of combined building and contents insurance | Around £140 per year, but it is often cheaper than having two separate policies. It averages £375 a year. |
| Cost of contents insurance | £132 per year |
| What does building insurance cover? | Permanent fixtures such as sheds, garages, greenhouses, drains, cables, pipes, interior fittings like baths, kitchen units, and loos. It also covers the cost of structural damage to your home caused by fire, flood, or storm. |
| What does contents insurance cover? | The cost of repairing or replacing personal items if they are damaged or stolen. |
| Who needs building insurance? | Freeholders or landlords. If you are a tenant, you do not need building insurance as it is the landlord's responsibility. |
| Who needs contents insurance? | Tenants or buyers who only own a property's lease. |
| Is building insurance worth it? | It is not a legal requirement, but it is highly recommended. It can protect your home from financial loss due to unforeseen events. |
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What You'll Learn
Buildings insurance is not a legal requirement
If you own your home, buildings insurance is not a legal requirement, but it is highly recommended. It can protect your home from financial loss due to unforeseen events like fires, floods, and storms. It covers the cost of repairing your home if it is damaged by an incident, including the cost of repairing structural damage to your home. It also covers permanent fixtures, such as your shed, garage, and greenhouse, as well as drains, cables, and pipes that are your legal responsibility.
The average UK price of buildings insurance is around £120 per year, but this can vary significantly depending on the property and the type of policy. When calculating the cost of insurance, it is important to consider the rebuild value of your home, not its selling price or current value.
While buildings insurance is not a legal requirement, it can provide valuable protection for your home in the event of unexpected damage.
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Contents insurance covers personal belongings
Contents insurance policies are typically calculated based on the number of rooms in a house (bedroom-rated policies) or the total value of the contents and possessions (sum-insured policies). Sum-insured policies may offer more cover but often come with higher premiums. When deciding on a contents insurance policy, it is important to consider any high-value items and whether additional coverage is needed. For example, specialist jewellery insurance or separate bicycle insurance for bikes over a certain value.
To determine the level of cover needed for contents insurance, it is recommended to visit each room, identify items worth insuring, estimate their replacement price, and tally the total value. This process helps ensure adequate coverage in the event of damage, theft, or loss. It is worth noting that most contents insurance policies have a "single item limit", which is the maximum claim amount per item. As a result, high-value items may not be covered for their full amount.
Contents insurance is particularly relevant for renters, as they are not responsible for building insurance, which is typically handled by the landlord or freeholder. The average cost of contents-only cover is relatively low, making it a worthwhile investment to protect personal belongings. Combined buildings and contents insurance policies are also available and can often be cheaper than separate policies. However, it is important to assess individual needs and circumstances when deciding on the appropriate level of coverage.
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The average cost of buildings insurance
The cost of buildings insurance can vary depending on a variety of factors, and there is no one-size-fits-all policy. The average cost of a single buildings insurance policy is £209 per year. Combined buildings and contents insurance is often cheaper than having two separate policies and averages £375 per year.
When calculating the cost of buildings insurance, it is important to consider the rebuild value of your home, rather than its selling price or current value. The rebuild cost is likely to vary over time, depending on changing material and labour costs. Older houses, houses with non-standard construction, or those with more rooms or higher-end features will typically cost more to insure.
The location of your property is another important factor. If your property is in an area that experiences natural disasters or severe weather, or is in a high-risk area for burglary or extreme weather, your insurance costs are likely to be higher.
The type of building materials used can also impact the cost of insurance. Buildings made from fire-resistant materials, for example, will typically cost less to insure.
If you are a tenant, buildings insurance is usually the responsibility of the landlord or freeholder, and you will only need to take out contents insurance. Contents insurance covers the cost of repairing or replacing personal items if they are damaged or stolen, with a ''single item limit' on high-value items.
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What does a good policy look like?
A good building insurance policy should cover the cost of repairing your home if it is damaged by an incident, such as malicious damage, fire, or flood. It should also cover the full cost of rebuilding your home, including permanent fixtures, such as sheds, garages, and greenhouses, as well as drains, cables, and pipes. Interior fittings like baths, kitchen units, and toilets should also be covered.
When considering a building insurance policy, it is important to review the exclusions, as wear and tear, damage that occurs over a prolonged period, faulty or poor workmanship, and storm damage to fences, hedges, and gates may not be covered. It is also important to ensure that the policy reflects the cost of rebuilding your home, rather than the price you paid for it or its current value. Reviewing your cover periodically is essential, as rebuild costs tend to rise over time.
Additionally, a good building insurance policy should offer liability coverage, which protects you from lawsuits filed by others, including injuries caused by your pets or accidents on your property. If you own valuable possessions, such as fine art, antiques, jewellery, or designer clothes, you may want to consider additional coverage through itemised schedules, riders, or separate policies.
When choosing a building insurance policy, consider the deductible, which is the amount you must pay before your insurer covers a claim. A higher deductible can lower your premium, but ensure it is an amount you can easily afford to benefit from the insurance when needed. You may also want to consider the method used to calculate the claim amount, such as the actual cash value or replacement value.
Finally, a good building insurance policy should provide peace of mind and financial protection in the event of unforeseen accidents or catastrophes. It is worth comparing different policies and considering your specific needs and risks to ensure you have adequate coverage.
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Buildings insurance for flats
If you own a flat, you will likely need buildings insurance. This is not a legal requirement, but most mortgage providers will require you to have it before lending you money. Buildings insurance covers the structure of the building, permanent fixtures, and fittings, such as kitchens and bathrooms, central heating, plumbing, and drains. It also covers any damage to the fabric of the building, including walls, ceilings, windows, and doors. It is important to note that buildings insurance does not cover personal belongings, and for that, you will need contents insurance.
If you are renting a flat, it is the landlord's responsibility to have buildings insurance, and it is usually the case that they will have this in place. However, it is important to check what their policy covers, as accidental damage may not be included, which could impact your deposit if something happens. As a tenant, you are only responsible for insuring your belongings, and contents insurance is usually sufficient.
When taking out buildings insurance, it is important to insure your flat for the amount it would cost to rebuild it, rather than the resale price. This is because the rebuild value is usually much lower than the property's worth. The Association of British Insurers (ABI) has a calculator to help work out the rebuild value of your flat. It is also worth noting that buildings insurance does not cover wear and tear, damage that happens gradually over time, faulty or poor workmanship, or storm damage to fences, hedges, and gates.
If you own a leasehold flat, the freeholder has likely arranged buildings insurance for the building, and you are paying the insurance costs via your service charge. In this case, it is still worth checking the insurance position and understanding your lease. If you jointly own the freehold with other leaseholders, it is recommended to take out one policy for the whole building to ensure all flats are insured on the same basis.
Overall, while buildings insurance for flats is not a legal requirement, it is often necessary to secure a mortgage, and it provides valuable protection for your property.
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Frequently asked questions
Buildings insurance covers the cost of structural damage to your home caused by fire, flood, or storm. It covers permanent fixtures, including your shed, garage, and greenhouse, as well as drains, cables, and pipes. It also covers interior fittings like baths, kitchen units, and toilets.
While it's not a legal requirement, building insurance is highly recommended. It can protect your home from financial loss due to unforeseen events. The average UK price of building insurance is £120 per year, and it can save you from much higher costs in the event of damage to your home.
Building insurance does not cover your personal belongings. For that, you need contents insurance, which covers the cost of repairing or replacing your personal items if they are damaged or stolen.
The amount of cover you need depends on whether you are a freeholder or a tenant. For buildings-only insurance, calculate the rebuild value of your home, not its selling price or current market value. Work out how much it would cost to repair your home in the event of damage, including building materials and labour.
Yes, you can buy a policy on behalf of someone else, but their details would be on the policy, and they would be the recipient of any potential claim payout.
