About Buildings Insurance
Association of British Insurers (ABI)
The Association of British Insurers (ABI) represents around 400 insurance companies, which between them account for over 98% of the business of UK insurance companies. The Association represents insurance companies to the Government and to regulatory and other agencies, and it provides a wide range of services to its members.
Notes from the ABI
Buildings insurance policies differ in the cover they provide and in their terms and conditions. The information here is of a general nature – for detailed information you must read your policy.
In addition to the structure, a buildings policy covers permanent fixtures and fittings such as baths and toilets, fitted kitchens and bedroom cupboards. Interior decorations are also covered. Policies usually extend to include outbuildings such as garages, greenhouses and garden sheds. Boundary walls, fences, gates, paths, drives and swimming pools may not be covered – you need to check the policy if you need cover for these areas.
Against What Risks?
Most policies cover damage to your home by:
- aircraft or things falling from them
- subsidence, heave and landslip
- falling trees or branches
- impact by vehicles or animals
- breakage or collapse of aerials
- riot and malicious persons
- escape of water from tanks or pipes
- storm and flood; and
- escape of oil from fixed heating installations.
Extensions of Cover
Most buildings policies have valuable extensions of cover.
- Alternative Accommodation – If your home is so badly damaged that you cannot live in it until repairs are done, your policy will help to meet the reasonable cost of alternative accommodation up to a stated limit.
- Liability – If, as owner of your home you are responsible for any injury to someone or for damage to their property, your policy will pay the damages and cost for which you are legally liable. There is usually an upper limit of £1 million or more. However, your main legal liability arises from you being occupier of your home and a contents policy covers this.
- Underground Pipes and Cables – supplying gas, electricity, oil or water, as well as sewage pipes, are insured against accidental damage. They are not insured against wear and tear.
- Glass – In doors, windows and skylights is covered against breakage together with baths, washbasins and WCs.
There are limits and exclusions to every policy so be sure you have read it. It is a legal contract and if there is anything you do not understand, ask for an explanation.
One word you will come across is 'excess'. The excess is the amount of money you have to pay towards the cost of each claim. Excesses vary in amount. They may apply only to certain types of claim or they may apply to all claims. Your policy will tell you. One excess that appears in almost all policies applies to damage caused by subsidence, heave or landslip. This is usually a specific amount (for example £1,000). Common exclusions are war risks, damage caused by storm or flood to gates or fences, frost, sonic bangs and radioactive contamination from nuclear fuel or nuclear waste.
The sum insured is the amount of money for which your home is covered. It is the most your insurers will pay under any circumstances. You must calculate an adequate sum insured to avoid claim payments being reduced because of under insurance. Regular checks should be made to ensure it remains correct. It is your responsibility to get the sum insured right.
The sum insured under a buildings policy must be the full rebuilding cost of the home. The market value of your home or the Council Tax band valuation have no direct relationship to the rebuilding cost of your home.
You can instruct a member of the RICS to prepare a professional Rebuilding Cost Assessment for insurance purposes.
A Rebuilding Cost Assessment will normally be carried out by taking detailed measurements of the house and using the rebuilding cost information provided by BCIS. However, this may not be appropriate in certain circumstances where the method of Rebuilding Cost Assessment will need to be specially agreed. The information on this site gives you advice on how to check the rebuilding cost for a range of standard house types.
You must make sure that the sum insured is kept up to date to allow for changing rebuilding costs. Many insurers help by 'index linking' your policy. This simply means that your sum insured is altered automatically whenever there is a change in the rebuilding cost. Usually there is no charge for any increase between renewal dates. Index linking can work properly only if your sum insured is right to start with. Make sure you keep it up to date by telling your insurance company if you improve your home – perhaps by installing central heating or building an extension. Do not rely on index linking alone to keep your sum insured up to date. Review your cover every few years.
If your property is damaged, do what you can to stop the damage getting worse. Many policies cover the cost of temporary work. Some insurers provide emergency 'helplines', which will help you to find a competent tradesman who can carry out emergency repair work.
Your insurance policy can help put things right, but cannot compensate for the upset and inconvenience. Take all the precautions you can to prevent the worst from happening. It has been found, in particular, that tree roots can cause damage to your own or your neighbour's property. It is important to take professional advice before planting or felling trees.