Building Insurance Policies
Building insurance can be split two ways by an insurance company: building insurance and content insurance. Then there is the matter of computation for the insurance policy: computation by the size or number of rooms that your building has or computation based on the cost of the building. A building insurance's clause is really dependent on the client's needs.
What is Building Insurance?
A building insurance covers the cost of structural damages to your property. The clause may include damage to the roof, walls, ceilings, floor, doors, windows and all other extra auxiliaries such as the garage and the perimeter fence. A building insurance may also cover the content of the structure itself such as furniture and fixtures, appliances, decorations like paintings and other home accessories, water tank, electrical, sanitary and plumbing lines and other utility-based supplies.
An ideal building insurance should be inclusive of the property's cost in case of rebuilding including cost of site clearing, demolition and other professional fees e.g., architect or engineer. The ABI (Association of British Insurers) issues out yearly guidelines on rebuilding costs that you use as basis.
You can choose to widen the scope of your insurance policy like including the accidental damage of the interior of your building for a better coverage but be prepared to pay extra for additional clauses. Traditionally most regular policies should include the following provisions for damage or loss relating to:
- Fortuitous events such as: bad weather including storms, floods and lightning; earthquakes; falling trees, lampposts, satellite dishes; impact by any mode of transportation
- Theft or attempted theft
Some building insurance policies could include the cost of temporary accommodation in case you have to leave your home or evacuate your building while repairs are ongoing. There is also a clause that you can include in case someone gets injured or dies in your property.
Terms Not Covered in Insurance Policies
Not all conditions are covered in insurance policies. Even if you have a building insurance that covers a lot of clauses, the normal wear and tear of your building is exclusive. It is also inclusive in your policy that you should take reasonable care of your property to prevent damage or lost. You must secure your building to prevent theft and it is imperative that you tell your insurer if you will be out of your house for more than thirty days.
There might also be exclusions in your policy like: damage due to war; nuclear explosions and the likes. If your property is prone to flooding you might be obligated to pay more for this inclusion. You might also get less compensation for property damages if your building was underinsured. If there are limitations on the amount you can be paid out for one term then you might not be fully covered by your insurer too.
Who Should Have Building Insurance?
Anyone who owns or rents should have some type of insurance. Getting an insurance policy for your building or lodging is for your own security and peace of mind. The following are those who are required to have a building insurance.
- Owner with mortgage - It is a requirement to have a building insurance for owners whose homes are mortgaged. The mortgage lender will see to it that the coverage of the building insurance is enough to cover the mortgage. However, it would be better if you insure your building to cover the whole reconstruction cost. There are mortgage lenders who also cover building insurance. It would be entirely up to you whether you choose the mortgage lender as your insurer or you get an independent one.
- Buyer or Seller of a house - If you buy a house you should insure the house from day one. As the house passes ownership the responsibility of any damage or lost regarding the house passes on to you. If you are selling a house, make sure you have insured your house too for as long as the house is yours, then the responsibility for any damages or lost is still on you.
- Owner or Occupier as leaseholder may be required to take out a building insurance too. However in most cases, the freeholder takes out the insurance then charges you for it.
- Tenants are not required to take out building insurance but they may want to get insurance for the contents of their lodgings.
Types of Building Insurance
The term householder, household combined or home owners insurance may be applied. For whatever name it is called, it's still a building insurance. The different types are:
- Personal policy - This covers residential buildings and private dwellings whether detached, semi detached or terraced.
- Commercial policy -This covers different properties that are used for commercial or business purposes. It could either be owner occupied or landlord owned rented out to tenants.
The premium is the price of your building insurance policy. Ask for 3-4 quotes from different insurance companies before you decide which one to get. Here are some points for comparison.
- Study in detail the exclusions and inclusions of the policy.
- Consider the amount of the excess. This is the first amount for any claim. For example you have to pay the first £100. Some companies have higher excess rates for cheaper premiums.
- Any offered discounts and bonuses.
- Consider the no claims bonus that insurance companies offer. This could total to a sizeable amount that could be discounted on your next premium.
Make sure you give the insurer the right and detailed information before you finalize the contract. Read and study the "fine" prints as many insurance claims and disputes arose from misunderstanding the contract.
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