What is building insurance?
A building insurance covers is a type of home insurance coverage that covers damage caused to the property’s structure due to various perils like floods, fire, storm, robbery, etc. The structure components covered in a building insurance policy typically includes sheds, garage, fence, etc. Adding to this, it also covers the cost of replacing parts like pipes, drains, and cables.
A comprehensive building insurance policy coverage can cover the whole cost of rebuilding your damaged house, including the cost of demolition, authorization of site, and architect fees. The building insurance typically covers damage caused to the following components:
- Natural calamities like fire explosion, floods, earthquakes, storms, etc
- Theft and vandalism
- Damaged lampposts, trees, satellite dishes, and other such elements
- Frozen and burst pipes
- Vehicle or aircraft collisions
- Subsidence
Why do you need a building insurance policy?
- For mortgage – When you go to mortgage your residence, the lender will check whether the building is insured or not. When you are selling a house, you are responsible for maintaining it until it gets sold out. Having building insurance acts as proof that the building is covered against natural and human-made perils.
- For leaseholder – If you are signing a lease, it may ask you to have building insurance in your name, or else the owner may buy the insurance and charge you for the same.
- For tenant – The landlord of the house on rent is responsible for the structural damage caused by various perils. However, the loss or damage of contents is on you as a tenant, which is covered under home insurance cover you choose.
- Smart choice – Be it mandatory or not, it is advisable to have a building insurance policy to secure the structure against damage caused by various perils.
What add-ons can you opt for in building insurance?
A basicbuilding insurance policy covers your structure of the house against standard perils. Though to provide it all-around protection from other risks, you will need to opt for some add-ons, which may cost you extra cost of premiums. You can choose from the following add-ons.
- Flooding if you are living area that is prone to floods
- Accidental damage of home components
- Substitute accommodation in case you need to relocate from your house
- Vandalized window glass, doors, conservatories and skylights
- Damage of cables, underground pipes, gas, and electric supplies
- Damage of fences, gates, driveways, boundary walls and pools
- Liability cover in case of damage caused to a third party or their property
- Legal expenses cover
How to decide building insurance coverage?
You need to buy a building insurance policy to save yourself from the financial burden of replacing or repairing your building from the damage caused by natural or human-made perils. It is important to decide a coverage amount carefully that will provide you the cost needed to repair or rebuild your house completely. This is called as the sum insured. This cost of the home insurance cover is not the same as the cost of the building when you purchased the property. It would rather be the current amount of house if you were to sell it. You can assess, calculate, and then decide the coverage amount.
