What Does Buildings Insurance Cover?

Buildings insurance protects the physical structure of a property. This type of insurance covers the costs associated with repairing or rebuilding a house if it sustains damage from unforeseen events. Its role is to provide financial protection against structural losses, ensuring the dwelling itself can be restored.

What Buildings Insurance Typically Covers

Buildings insurance policies cover damage to the physical structure of a home, including its walls, roof, floors, and other integral components. This protection extends to permanent fixtures such as fitted kitchens, built-in wardrobes, and bathroom suites. It also typically includes other structures on the property, like detached garages, sheds, driveways, and perimeter fences.

Policies commonly cover damage resulting from various perils, including fire, smoke, and explosions. Protection is offered against natural occurrences such as storms and lightning. Flood coverage can vary depending on the policy and location. Impact damage from vehicles or falling trees is also included.

Additional covered events include malicious damage or vandalism to the property. Damage from burst pipes or other sudden water leaks within the plumbing system typically falls under this coverage. Some policies also offer protection for subsidence, heave, and landslip, which involve ground movement affecting the building’s foundation.

Accidental damage to the building’s structure can be covered, depending on the policy’s terms. For instance, if a wall is accidentally damaged, the policy might cover repair costs. Review policy details to understand the extent of accidental damage coverage.

Common Exclusions from Buildings Insurance

While buildings insurance offers broad protection, it does not cover every type of damage or loss. Standard policies typically exclude damage from normal wear and tear or gradual deterioration, such as an aging roof. Damage resulting from a lack of routine maintenance or neglect is also generally excluded from coverage.

Cosmetic damage that does not affect structural integrity, such as minor scratches or dents, is often excluded. Damage caused by insect or vermin infestations, such as termites or rodents, is another common exclusion. Insurers expect property owners to manage pest control.

Specific natural disasters, like floods and earthquakes, are frequently excluded from standard policies. Property owners in high-risk areas often need separate, specialized policies, such as flood insurance through the National Flood Insurance Program (NFIP) or earthquake insurance. Acts of war, terrorism, or nuclear hazards are also excluded from coverage.

Policies typically do not cover intentional damage caused by the policyholder or those acting on their behalf. Damage arising from pollution or contamination is another common exclusion. Losses due to off-site power failures are generally not covered, unless they directly lead to a covered peril like a fire.

Understanding Key Buildings Insurance Terms

Understanding the terminology used in buildings insurance policies is important for homeowners to interpret their coverage accurately. One fundamental term is “sum insured,” which represents the maximum amount an insurer will pay if a home is damaged or destroyed and requires repair or rebuilding.

It is important that the sum insured reflects the full “rebuild cost” of the property. This includes expenses for demolition, debris removal, labor, materials, professional fees, and costs to comply with current building regulations. This figure is distinct from the property’s market value, which is influenced by land value and location.

The “excess” is the predetermined amount a policyholder must pay out-of-pocket toward each claim before the insurance coverage begins to pay. This amount is selected by the policyholder when the insurance is purchased and can influence the premium.

The “premium” itself is the regular payment, typically monthly or annually, made to the insurer to maintain the insurance coverage.

A “policy schedule” is a document that provides a summary of the insurance policy, detailing specific information such as the policyholder’s name, the dates of coverage, the insured property, and the chosen coverage limits and excesses. The “underwriter” is the professional who assesses the risk associated with insuring a property and determines the terms, conditions, and premium for the policy.

“Endorsements” or “add-ons” are modifications or extensions to a standard policy. They can either broaden coverage for specific risks, like adding flood or earthquake protection, or adjust existing terms.

Buildings Insurance Versus Contents Insurance

Buildings insurance and contents insurance protect different aspects of a property. Understanding this distinction is important for comprehensive coverage. Buildings insurance focuses solely on the physical structure of the home and anything permanently attached to it. This includes the roof, walls, floors, windows, and any fixtures that are integrated into the building, such as fitted kitchen units, bathroom suites, and built-in cabinetry.

Contents insurance, in contrast, covers the personal belongings and movable items within the home. These are possessions that could be taken with you if you were to move. Examples include furniture, electronic devices, clothing, jewelry, and appliances that are not built-in. The key difference lies in whether an item is a permanent part of the building or a movable possession.

For instance, if a fire occurred, buildings insurance would cover the repair of damaged walls and the roof. Contents insurance would cover the replacement of burned furniture and electronics.

Homeowners often purchase these two types of coverage separately or as part of a combined home insurance policy. Landlords typically need buildings insurance, while tenants are usually responsible for contents insurance.