There are two basic types of household insurance: buildings insurance and contents
insurance. Buildings insurance covers the physical structures on your property.
Different insurance packages offer different types of cover, but typically
buildings insurance will cover the main structure on the property, as well as
other structures like garden cottages, garages and walls.
By far the most important common consideration when it comes to buildings
insurance is protection against fire damage or loss. It will normally be a
condition of your bond that you have buildings insurance so that losses in the
event of some disaster can be recovered. Buildings insurance will allow you to
rebuild or repair your structure, so that you can either sell it or continue to
live there.
This means that you need to ensure that your policy covers you properly
(bearing in mind inflation, of course - you may not be able to rebuild your home
for the same price that you paid for it, so you need to take this into account).
You need to make sure that your policy will pay you out enough should you need
to entirely rebuild your home or portions of it.
What are you covered for?
There are numerous events beyond your control that you will need cover
against. These include:
- Natural elements (storms, floods, earth tremors)
- Plumbing accidents (pipes bursting, water leakage, seepage, rising damp)
- Fire and explosions (including smoke damage)
- Subsidence (where your property subsides due to changes in the ground it
is built on)
- Third party damage (someone's car crashing into your wall, for example)
Another thing to bear in mind (and that is surprisingly overlooked in many
cases) is that while your insurance policy needs to cover rebuilding or
repairing your home, you'll need somewhere else to stay while this is being
done. So your policy needs to make provision for this. Don't just go for the
cheapest policy that appears to cover all the basics - you may find yourself
temporarily without a roof over your head even though your buildings are
insured.
As we mentioned before, your main house isn't the only thing that buildings
insurance can cover. A normal policy will usually cover things like garden
cottages, sheds, garages and other physical structures on your property. Some
will also cover boundary walls, fences, driveways and swimming pools - but you
need to check the individual policies as they won't all do so.
The other things that are covered by buildings insurance are the permanent
fixtures and fittings in your home. These are things like built-in cupboards;
baths, toilets and washbasins; and other immovable items that are part of your
home. The key word here is immovable - only things that cannot be removed are
covered. So, for example, light fittings that you could take out and move to a
new home will not be covered. As we'll discuss in the next section, you need a
different kind of insurance for your movable possessions.
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