Key Facts to Know Before Buying

Here are some of the points you should consider before purchasing a buildings insurance policy:

Buildings Insurance and your Mortgage

Until you have paid off your mortgage, your lender owns your home, and will require you to insure it against any damage. Many lenders will offer you their own insurance policy at the time you take out the mortgage. However, they will not necessarily be the cheapest, so compare their rates with other companies before signing up.

It is essential that you arrange buildings insurance to start from the point that you first become responsible for the premises: usually when you exchange contracts.

Checking the Policy

Make sure you read the policy carefully. An insurance policy is a contract that sets out the legal obligations of both the insurer and the policyholder, so it is vital that you fully understand what you are agreeing to. Ensure that you are aware of the level of cover it provides, and the conditions in which you can make a claim. Remember - if you do not understand any of the points, contact your agent for clarification.

Exclusions

These explain what your policy does NOT cover. You should read your policy to be sure you are clear about what it does not provide.

Excess

In the event you make a claim you may be required to pay the first part yourself - this is called an excess. The amount of excess will vary depending on the policy and the claim. However, excess does not usually apply to claims such as damage caused by storm or flood to gates or fences, war risks, frost, sonic bangs and radioactive contamination.

Extension of Cover

For an additional premium, you can widen your policy to cover additional risks, such as accidental damage. This means that you will be covered against accidents such as spilling paint on a carpet, or putting your foot through the loft ceiling.

The Premium

Most insurers calculate premiums for buildings and contents cover based on the postcode of the property to be insured. This allows the premiums to reflect the claims experience in that area. It's worth bearing in mind however, that not all insurers place the postcodes in the same rating bands. This means that premiums can vary considerably for similar risks in the same locality, and so it's advisable to shop around for quotes.

There are a number of other factors are taken into account when calculating the premium such as the amount to be insured and the policyholder's previous claims history.

Some insurers will require you to pay your premium in full before cover starts, whilst others may allow you to pay in instalments (sometimes at an additional cost). If you decide to spread the cost of your insurance, it is crucial to remember to keep up the payments; otherwise your cover will be cancelled.

No Claims Bonus

Many insurers operate a no-claim discount system when policies are renewed with them. Check on your renewal notice to see if this applies.

Security

Many insurers will offer a discount if you have installed an approved alarms or particular security fitting. Other insurers may insist on this additional security before providing cover.