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Published On: Tue, May 5th, 2020

What Is Buildings Insurance and What Does It Cover

A building, such as a home, is the most expensive asset that many people will ever own. And even if you’re not compelled to do so by law (and sometimes you will be), it makes sense to protect that asset. Building insurance is often largely bought regularly as most people see it as a necessary expense, even though it will hardly ever get used. And while it’s true that total losses are rare for buildings, this type of insurance covers a lot more as well. Keep reading to find out everything you need to know about it and what you could do to get the most value from yours. 

The Basics of Buildings Insurance

Broadly speaking, standard building insurance covers the costs of repairing damage to any structure on the insured property. Business buildings insurance works much the same way, only the coverage is designed with businesses in mind. 

The exact wording of a policy will differ based on the issuer, but there are some common aspects that most policies will cover. For instance:

  • Damage to the structure of primary buildings as a result of theft, natural disasters, subsidence of land, fires, burst pipes and so on. 
  • Damage to outbuildings such as terraces or sheds.
  • Liability protection for injuries or property damage that you, as the policyholder, are liable for.

Business buildings insurance policies additionally cover other business-related losses. These may include:

  • Stock and cash on the premises.
  • Loss of business income as a result of an insured event.
  • Legal cover for public liability.

photo supplied, courtesy of guest blogging network

Working from Home

A peculiar situation arises if you’re using part of your home as a home office. Standard building insurance doesn’t always provide coverage for that scenario. In this case, you would purchase home insurance that includes wording for things such as income loss from utilities failures, costs of replacing business documents, and liability resulting from the revenue-generating activities (eg clients visiting your home premises). The specifics, of course, will respond to your particular needs.

How Much Coverage Is Right? 

As with other types of insurance, the amount of coverage will ultimately be up to how much you value your buildings and possessions. However, there are a few factors worth considering that make building insurance a little different than other kinds. 

For one, building insurance is relatively cheap. As stated earlier, total losses are extremely rare – resulting principally from subsidence and flooding. Barring extenuating circumstances, though, building insurance typically costs around 50p per £1000 insured. 

That’s not to say that there aren’t buildings that cost much more to insure. In actual fact, some buildings are in such high-risk areas (such as floods zones) that commercial insurers may refuse to insure them at all. Additionally, consider that a business may include more than one property and each of these will require coverage as well. 

Ways to Reduce the Costs of Building Insurance

As far as buildings expenses go, building insurance isn’t terrible for your bottom line but it’s always nice to find ways to economise. Here are a few ways to do just that:

  • Combine buildings and content insurance policies. Many insurance providers will be willing to bundle insurance and provide a discount. If you need to insure both your commercial property and its contents, bundling them is a good way to save money. However, this does have a caveat attached, and it’s that bundling insurance isn’t always cheaper, which segues into the next point
  • Take your time comparing policies. Actuaries have many ways of risk analysis which can result in significantly different prices for the same property from different insurers. You may even find that two cheap policies bought individually are cheaper than purchasing a bundled policy. 
  • Avoid extras that you don’t need. This is where insurers make most of their profit. For some people, extra coverage such as legal expenses makes sense, but you’ll largely be offered add-ons that you don’t need. Examine them carefully, but don’t be taken in just because it’s offered.
  • Don’t overvalue your buildings (but don’t undervalue either). Make a realistic assessment of what it would cost to rebuild your building following a total loss and insure for that amount. If that isn’t the market cost of the building, you could enlist the help of a chartered surveyor to assess your property.
  • Take advantage of no claims bonuses. Many insurers offer a discount for every year that passes without a claim made on the property. To build up this bonus, make sure you protect your home from damage as much as reasonably possible. Things like insulating water pipes and installing smoke alarms can prove to be wise investments in the long run. 

Your Most Expensive Asset Deserves Proper Insurance

Total loss is uncommon for buildings.As a result, building insurance is relatively inexpensive. Given the importance of a home or business structure, it’s wise to procure an adequate level of insurance. As with other types of insurance, there are good ways to reduce the costs and it’s important that you decide exactly what you want to cover. Find the right rebuild value of your property, and don’t pay for add-ons that you certainly won’t need. You can check out for more information InsuranceInspect Services

Author: Lee Sadawski

A must for every construction company in the US

How Do You Insure the Priceless?

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