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Why You Need Building Insurance When Buying a House

Updated: Oct 14

Model house inside a shopping trolley, representing key considerations for building insurance when buying a house.

Buying a home, whether it’s your first home or not, is a really exciting time. But before you can move in and get settled, there are a few things you need to take care of! One of these is insurance.


Building insurance when buying a house is an essential step in protecting your new investment. It covers the cost of rebuilding your home if it's damaged by events like fire, storms, or even vandalism. While it’s easy to get caught up in the excitement of becoming a homeowner, arranging buildings insurance should be a top priority. In fact, most mortgage lenders will insist you have this insurance in place before the sale completes.


The importance of building insurance all comes down to financial security — you don’t want to be left covering the costs of repairs or even a total rebuild, if something awful happens. Knowing your home is insured from day one means peace of mind, so you can focus on properly settling into your new space. This blog will explore when to get building insurance, what it should cover, and how to ensure you’re fully protected.


Understanding Building Insurance

Building insurance (also called home insurance) is designed to cover the cost of rebuilding or repairing your home in case it’s damaged or destroyed by events like fire, flooding, or structural collapse. The insurance covers the structure itself — think walls, roof, and permanent fixtures, fittings like your kitchen or bathroom, and even your built-in wardrobes. If an unfortunate event occurs, this type of cover ensures you won’t have to pay out-of-pocket for major repairs or rebuilding from scratch.


The importance of building insurance goes way beyond compliance with mortgage lenders — it offers you protection for what is likely your biggest financial asset. It's essential that the policy covers all potential risks, including damage from natural disasters or accidental incidents. Some policies also offer optional extras like legal expenses cover, which can be useful if you face disputes over property damage. To ensure the most complete protection, consider policies that also include accidental damage cover, which might save you from unexpected repair bills in the future.


It’s worth noting that the contents of your house are not covered under a basic policy, nor is this generally a legal requirement for your lender. If you want to cover your possessions inside the home, you’ll need a contents insurance policy too. 


Timing: When to Arrange Building Insurance When Buying a House

Clock next to a model house, symbolising the importance of timing in building insurance when buying a house.

Ideally, you should have buildings insurance cover in place from the moment you exchange contracts. This is the point at which you become legally responsible for the property, even if you haven’t moved in yet. If something happens between exchanging contracts and completing the purchase — such as a fire or flood, or even vandalism — you'll be covered.


It’s important to coordinate with your insurer and mortgage lender to ensure you’re fully covered. Most mortgage lenders will require proof of insurance before releasing funds. Failing to secure insurance at the right time could cause delays or, worse, leave you financially vulnerable.


Don’t wait until the last minute — arranging buildings insurance early will save you stress down the line and ensure your home is protected from day one.


Coverage Details: What Should Be Included in Your Policy

When selecting building insurance when buying a house, it’s crucial to understand the level of cover you need. First, ensure the policy covers rebuild costs — this is the total amount required to completely rebuild your home from scratch, including all fixtures and fittings. This is different from the market value of your home, which people often misunderstand.


Top tip: Don’t be caught short. Have a current rebuild cost assessment done by the professionals, to be sure you’ve got the right level of cover. RebuildCostASSESSMENT.com can do this for you with a desktop assessment that ensures you’re not over or underinsured.


Look for policies that also cover accidental damage. This means if something unexpected, like a burst pipe or broken window, occurs during your ownership, you won’t be left with a hefty repair bill. For extra security, some policies include legal expenses cover to protect you if a legal dispute arises from property damage.


Comparing Building Insurance Policies

With so many options available, knowing how to compare home insurance policies is the best way to finding the right one for you. Start by assessing the coverage each insurer offers. You’ll want to make sure you’re fully covered for all rebuild costs, fixtures and fittings, and additional extras like accidental damage and legal expenses cover.


Price is important, but it shouldn’t be the only factor. Look for policies that balance cost with coverage. Many insurers offer online tools that allow you to easily compare different policies side by side. This can help you understand the full insurance cost and what’s included.


Using trusted comparison websites to check the finer details of each policy is a good place to start when looking for a new policy, as these can help you compare many different options and understand the coverage details of each. Try Go Compare, Compare the Market, or Confused.com. Pay close attention to exclusions or limits on claims, as these can affect your overall coverage.


Legal Requirements and Mortgage Considerations

When buying a house, having the right building insurance isn’t just a good idea — it’s often a legal requirement for securing a mortgage. Most mortgage lenders will insist on seeing proof of buildings insurance before finalising the loan, as they want to ensure the property is protected against major risks.


It’s important to arrange your insurance before exchanging contracts to avoid any delays in the buying process. Without adequate coverage, your mortgage lender may withhold the release of funds, putting the purchase at risk.


Remember: Always double-check with your lender about specific insurance requirements, ensuring the policy meets all legal obligations and covers the full rebuild value.


Financial Considerations and Budgeting

Couple using a laptop to research building insurance when buying a house, focusing on financial decisions.

When budgeting for building insurance when buying a house, it’s important to strike the right balance between coverage and cost. Start by getting a rebuild cost assessment to ensure the insurance covers the full cost of rebuilding your home. This prevents underinsurance, which can lead to hefty out-of-pocket expenses if disaster strikes.


To manage the insurance cost, compare different policies using online tools. Look for ways to save on insurance by bundling contents insurance with building coverage or opting for a higher excess to reduce your premiums. Many insurers offer discounts for newer homes or those with enhanced security features, like alarm systems or secure locks.


At RebuildCostASSESSMENT.com, we offer desktop assessments that can help you find the most accurate rebuild value, ensuring your coverage is both adequate and affordable.


Conclusion

Securing the right building insurance when buying a house is a vital step in protecting your investment. By ensuring comprehensive coverage that includes rebuild costs, fixtures and fittings, and even additional protection like contents insurance and accidental damage cover, you can have peace of mind as a new homeowner.


At RebuildCostASSESSMENT.com, we help homeowners avoid common pitfalls, with an accurate and up-to-date rebuild cost assessment.  This means you’re never over or underinsured and best of all, you know you’re fully covered if the worst happens. Don’t wait until it’s too late — make sure your coverage is spot-on with a desktop assessment today.


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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