Buildings insurance is often treated as a box to tick. Mortgage lender wants it, paperwork gets signed, job done. The humour comes later, usually when someone realises the policy they’ve had for years doesn’t quite match the house they live in.
At its core, buildings insurance protects the physical structure of a property. Not the value on the estate agent’s window. The bricks, mortar, roof, and things fixed in place.
What buildings insurance actually covers
Buildings insurance is designed to pay for repair or rebuild following specific insured events. Fire, flooding, storms, impact damage, escape of water. Sudden incidents rather than slow decline.
It usually includes permanent fixtures. Fitted kitchens and bathrooms. Built-in wardrobes. Pipework and wiring hidden behind walls.
- Walls, roofs, floors and ceilings
- Permanent fixtures and fittings
- Outbuildings such as garages and sheds, within limits
The aim is to return the structure to its previous state, not to improve it.
Rebuild cost versus property value
One of the most common snags is confusing rebuild cost with market value. They are not the same thing.
Rebuild cost reflects labour, materials, professional fees, and clearing the site if the worst happens. Market value reflects demand, location, and optimism.
Using the wrong figure can lead to underinsurance, which can affect how claims are settled.
What buildings insurance usually does not cover
Buildings insurance responds to events, not ageing. Wear and tear, gradual deterioration, and poor maintenance generally sit outside the policy.
A roof that finally gives up after years of neglect is treated very differently to one damaged suddenly in a storm.
- General wear and tear
- Gradual leaks and long-term damp
- Defects caused by poor workmanship
Understanding that boundary avoids unrealistic expectations.
Mortgage requirements and timing
Most mortgage lenders require buildings insurance to be in place from exchange of contracts, not completion. That catches people out.
From exchange, responsibility for the building usually passes to the buyer. Insurance needs to match that shift.
Failing to arrange cover early enough is a surprisingly common mistake.
Leasehold properties and shared buildings
For leasehold flats, buildings insurance is often arranged by the freeholder and paid through service charges.
In those cases, taking out a separate buildings policy would duplicate cover. Contents insurance is usually what the individual leaseholder needs.
The wording of the lease matters more than assumptions.
Excesses and how they affect claims
Buildings policies often include compulsory excesses, sometimes with higher excesses for certain risks like subsidence or escape of water.
A lower premium paired with a high excess changes the point at which claiming makes sense.
It’s one of those details that rarely gets attention until a claim is considered.
Accidental damage and optional extensions
Accidental damage to the structure is not always included as standard. Dropping something heavy through a ceiling, drilling into a pipe. Those scenarios may sit outside basic cover.
Optional extensions can change how the policy behaves, but they also change cost and excess levels.
Unoccupied periods and conditions
Buildings insurance often places limits on how long a property can be left unoccupied. Beyond that, certain risks may be excluded unless the insurer is informed.
This matters during renovations, extended travel, or between tenants.
Keeping the policy aligned with the property
Houses change over time. Extensions added. Loft conversions completed. Outbuildings repurposed.
Buildings insurance needs to reflect those changes. Otherwise, the policy slowly drifts away from reality.