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Essential Guide to Building Insurance Comparison

A house protected by a shield

Do you feel overwhelmed by the sheer volume of home insurance options out there? Hundreds of building insurance companies in the UK are all spending big money on telling you why they’re the best and why you should take out a policy with them. Sometimes, it might feel easier to pick one randomly or stick with your current provider to avoid the hassle.


However, it's always a good idea to compare building insurance options. You might think the only benefit of this would be to save you money, but this process is crucial in ensuring your property has suitable protection. Home insurance policies are not ‘one size fits all’. Why settle when you can compare and find the insurance that meets your needs?


Understanding the key factors to consider and comparing different policies can make the process much more manageable. In this essential guide, we’ll run through what you need to know and give you the tools necessary to make informed choices when comparing building insurance.


The Importance of Comparing Building Insurance


You might think, ‘What’s the point? Shouldn’t all home insurance policies give me the cover I need?’ The answer is simply, no, they will not. This makes building insurance comparison essential.


For example, certain risks, such as flood risk, can make it difficult to find suitable coverage. If you know the risks to your home, you will need to choose a policy covering these specific areas.


If you don't compare, you might not be fully covered for certain risks, or you could end up paying too much. Comparing insurance policies allows you to check what you are able to claim on your home insurance. Some policies might have limits or exceptions that could affect your future claims. By looking at different policies, you can make sure you're protected where you need to be.


And yes, comparing also helps you save money. Data shows that people who compare home insurance policies usually save a good amount. The leading comparison sites report savings of around £196 to £211 (as of May 2024):



Key Factors in Building Insurance Comparison

 

Man surrounded by boards, standing over a model of his home, contemplating insurance options

If you are comparing building insurance policies, there are some important factors to keep in mind. These include:


  • Buildings cover: This is the core of any building insurance policy. It covers the cost of repairing or rebuilding your home if it's damaged by events like fire, flood, or storm. Make sure the policy covers all necessary risks and check if there are any exclusions that might affect you based on your location or property type.

  • Cost of rebuilding: This isn’t the market value of your home; it is the cost of rebuilding it from scratch if it were destroyed. It includes the cost of materials and labour and sometimes additional costs like architect's fees. It’s important to have an accurate rebuild cost to make sure you’re not over or underinsured. Being underinsured could leave you with a large bill if your home needs to be rebuilt.

  • Insurance quote: When looking for insurance, it's smart to get quotes from several companies to compare prices and what they cover. Each quote will tell you what the policy includes and how much it costs, helping you find the best deal for your needs.

  • Claims discount: This is also called a no-claims discount. It's a way to lower your costs if you haven't made any claims on your home insurance for a while. It rewards you for having a good insurance record and can greatly reduce your expenses. It's important to know how this discount builds up each year and how making a claim could change it.

  • Excess: This is the amount you agree to pay towards a claim before the insurance kicks in. Higher excess often lowers the overall cost of home insurance, but you should only choose an excess you can afford in case of a claim.

  • Insurance companies: Check customer reviews and feedback on how claims are processed and how helpful and efficient the company is when dealing with questions. A lower premium might not be worth it if the service is poor or claims are handled slowly.


Step-by-Step Guide to Comparing Building Insurance

A woman browsing the web on her laptop

When you compare options, it's not just about saving money. It's just as important to find a policy that fits your needs, meets legal requirements, provides quality service, and covers specific risks like flooding.


We’ve laid out simple steps below to help you to find the right insurance coverage for you:


Step 1: Have Your Property Information Ready


Step 2: Assess Your Risk Factors

  • Flood Risk: Use maps from environmental agencies or online tools to see if your property is in a flood risk area. Properties in high-risk areas might need special coverage.

  • Other Risks: Think about other risks specific to your location, such as subsidence or high crime rates, which could affect the kind of policy you need.


Step 3: Understand the Legal Bits

  • Building Insurance Requirements: Some mortgage lenders ask for certain levels of coverage. Make sure your policy meets these requirements.

  • Coverage Essentials: Check the legal needs for liability coverage, especially if many people visit your home or if you employ someone there.


Step 4: Obtain Quotes

  • Comparison Websites: Use reliable comparison sites to get a broad range of quotes.

  • Direct Insurer Quotes: Contact insurers directly for quotes that might not be available on comparison platforms.


Step 5: Check the Quotes

  • Coverage Details: Look beyond the price. Check what's covered and what's not, particularly for legal and high-risk elements like floods.

  • Excess Amounts: Note differences in excess amounts, as these can significantly affect the claim process and costs.


Step 6: Consider Auto-Renewing

  • Pros: Keeps your coverage continuous and prevents the risk of suddenly being uninsured.

  • Cons: If you do not check other options, you might miss cheaper or more suitable deals.


Step 7: Negotiate

  • Leverage Competing Offers: Use quotes from other companies to help you negotiate better terms.

  • Ask for Discounts: Always ask for discounts or improved terms, especially if you haven't made any claims or have made your property safer against risks.


Step 8: Review Annually

  • Annual Check: Make sure to review your policy each year before auto-renewing to ensure it still fits your needs and to consider any changes in risks or legal rules.


Mistakes to Avoid When Comparing Building Insurance

A man shrugging, looking confused

Mistake 1: Not Considering Flood Risk

  • Problem: Some people think that if their property hasn't flooded before, it's unlikely to flood in the future.

  • Impact: Not having proper flood risk insurance can result in high repair or rebuild costs.

  • Tip: Look at flood maps from environmental agencies or your local council. If your area is at risk, consider the extra cover.


Mistake 2: Just Focusing on the Price

  • Problem: Choosing the cheapest policy without checking the limits and exclusions can mean you’re not fully protected.

  • Impact: Cheaper policies can have higher excesses or coverage exclusions that can be expensive in the event of a claim.

  • Tip: Balance cost with coverage. Review what's excluded and the terms for claims. Make sure the policy meets your needs.


Mistake 3: Forgetting Contents Cover

  • Problem: Many people buy building insurance but forget to add content coverage.

  • Impact: If your personal items are damaged or lost due to theft, fire, or other risks, they may not be covered.

  • Tip: Check your contents cover. You can save money by getting both building and contents insurance from the same provider.


Mistake 4: Not Regularly Reviewing Your Insurance

  • Problem: Many people don't remember to update their insurance when their property or life changes.

  • Impact: If you improve your home or buy valuable things, you might not have enough insurance coverage.

  • Tip: Review your insurance every year or when big changes happen at home or with your belongings. This keeps your coverage up-to-date and effective.


Mistake 5: Ignoring Policy Exclusions and Limitations

  • Problem: Many people don't read their policy documents carefully and don't know what's not covered.

  • Impact: This might mean you can't claim for certain damages or losses, which could be costly when you need support.

  • Tip: Always read the fine print. Make sure you understand what your policy excludes, limits, and requires. If anything is unclear, ask your insurer to explain it.


Deciphering Insurance Terms

A hand flicking through a dictionary

Now for something we’re not so keen on… jargon. There’s a lot when it comes to insurance, so we’ve put together a list of common insurance terms and their definitions. Understanding these terms will help when you’re comparing your home insurance options.

Insurance Term

Definition

Building Insurance

Protection against damage to the physical structure of your home, including the roof, walls, and floors.

Contents Insurance

Cover for items in your home. From furniture to personal possessions.

Combined Buildings and Contents Insurance

A single policy that covers both the building's structure and the contents within.

Premium

The amount you pay to keep your insurance policy active. This can be monthly or annually.

Deductible/Excess

The amount you agree to pay towards a claim before the insurance coverage kicks in.

Coverage Limit

The maximum amount an insurance company will pay out for a claim.

Flood Risk

The potential for flooding in your area and how it affects your insurance needs and premiums.

Claims Discount

Also known as ‘No Claims Discount’. This is a reduction in premiums offered by insurers when you haven’t made any claims over a certain period.

Underwriting

This is the process where insurers assess the risk of insuring a home and determine the terms and cost of the policy.

Liability Coverage

Insurance that protects against claims for injuries and damage to other people or their property.

Rebuilding Cost

The amount it would cost to rebuild your home from scratch in case of complete destruction, such as from a fire.

Policy Exclusions

Conditions that are not covered by a policy.

Endorsements

These are changes to the standard policy terms that either add to or limit the coverage.

Adjuster

Someone who looks into an insurance claim to decide if the insurer should cover the damage or injuries, and how much they should pay.

Renewal

When you choose to continue your policy for another period. It's standard to renew for buildings each year.

Legal Requirement

Insurance that the law requires you to have, such as building insurance for a mortgage.

Lapse in Coverage

A period where you have no valid insurance as you have either missed payments or cancelled your cover.

Quote

A price based on information you provide about your home and insurance needs.

Inflation Protection

Sum Insured

The maximum amount you can claim on your building insurance. This should reflect the rebuilding cost of your property.


Conclusion and Next Steps


It's important to compare building insurance options carefully. When you compare quotes, you make sure you get the best coverage and can save money, too. Your insurance isn't just about protecting your property. It gives you peace of mind and financial security.


Recap of Key Points:


  • Assess Your Needs: Start by evaluating your property and personal insurance needs accurately.

  • Consider Risks: Pay special attention to specific risks, like potential floods, that may need specialised coverage.

  • Compare Thoroughly: When comparing policies, look beyond the premiums. Compare what each policy covers, the exclusions, and the terms of the claims process.


For the best prices, MoneySavingExpert.com suggests looking at quotes 21 days before your home insurance renewal date. Even if you've missed that window, you could still save. Start comparing today using trusted comparison websites or by contacting insurers directly. If you need cover for specific risks, it might help to talk to an insurance broker to customise a policy to your needs.


Take the next step towards protecting your property and peace of mind. Start comparing today to ensure your home and belongings are covered with the best insurance policy available. And remember, the one thing you should never be is underinsured. To find out why and what you can do about it, start by clicking the button below.



Important disclaimer: The information provided here is for general informational purposes only and is not intended as professional advice. While we strive to ensure all information is accurate and up-to-date, the content may not reflect the most current legal or regulatory developments, standards, or practices. No representations or warranties are made (express or implied) about the accuracy of the information provided, and reliance on this information is strictly at your own risk.


We do not offer financial advice and nothing within this content should be construed as such. We recommend consulting with a qualified professional who can provide tailored advice based on your individual circumstances before making any decisions related to insurance.


Please note that we are not regulated by the Financial Conduct Authority (FCA) and as such, are not qualified to provide specific financial or insurance advice. Please see our footer for further information about us, including our website terms of use, privacy policy and more.

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