The Full Spread Blueprint Layout: Insurance for Buildings
TLTR: This blog explores whether you need to get insurance for buildings, what building insurance covers, what you need to consider while choosing building insurance, and suggests ways to decrease the cost of premium.
A building is more than just a structure. For many, it’s also a source of income and livelihood. Any damage to a building can cause a heavy financial strain to the owner.
As the owner of a building, you need to make sure that your building is first, well maintained, and secondly, well protected if it somehow gets damaged.
Building insurance can help you mitigate some of the strain that can arise from such disasters by acting as a financial safety net.
In this blog
- What is Building Insurance?
- Who needs Building Insurance?
- Who doesn’t need Building Insurance?
- What does Building Insurance cover?
- What are the Building Insurance Exclusions?
- What you need to know when choosing Building Insurance
- How can I lower my Building Insurance?
- Frequently Asked Questions (FAQs)
What is Building Insurance?
Building insurance covers the actual brick and mortar of your building. It helps cover the costs of repairing damage to a building structure, including most of its permanent fixtures.
Depending on the policy you choose, its coverage also extends to garages, sheds, and fences; and can cover the cost of repairing or replacing pipes, drains, and cables.
As long as the structure or its permanent components gets damaged by a covered peril, your insurance company will compensate you with the agreed-upon payout.
Note: Structures such as swimming pools aren’t typically covered. But you can add them into your policy for an added cost.
If you want to cover any freestanding appliances and decorative items like carpets and drapes, you’ll need to get separate contents insurance.
To be on the safe side, it is always good to check the details of your policy to confirm the extent of the coverage.
Who needs Building Insurance?
Whether or not you need building insurance depends on several factors. You’ll need building insurance:
- If you own your house or building in full and don’t have a mortgage on it, then there’s no legal requirement for you to have any insurance for a building. But it is vital to understand that the cost of repairs to your building can be very expensive out of pocket. Getting building insurance can help you save a lot of money in the long run. As an added benefit, it can also help you get peace of mind.
- If you’re a homeowner with a mortgage, your lender is likely to insist that you have appropriate and adequate insurance for the building, at least till the remainder of the mortgage term. As your lender still has a stake in the property, they will want to ensure that it is well maintained and protected under your tenure.
You will need to already have building insurance the day that you sign the exchange contracts. This is because this is when the property’s legal responsibility is passed on to you.
- If you’re a landlord of the building, you still own the structure and are responsible for any repairs that it might need. So, building insurance can cover almost all the costs you might need.
Who doesn’t need Building Insurance?
If you’re renting a building, then it’s the landlord’s responsibility to have the building structure insured. However, building insurance will not cover your personal property. So, you might want to look into renters insurance if you want to make sure that your personal belongings are covered in the event of any unforeseen event.
If you own a flat, the building that it is a part of might already has building insurance. However, it’s always a good idea to check to see if you need to get any coverage of your own.
What does Building Insurance cover?
Standard building insurance usually covers losses or damage resulting from:
- Fire, smoke, explosions,
- Floods, earthquakes, and storms
- Theft and vandalism
- Frozen and burst pipes
- Fallen objects like lampposts, trees, satellite dishes
- Vehicle or aircraft collisions
Statista states that earthquake insurance premium written rose from $3.5 billion to $3.1 billion in 2018. Similarly, according to the Insurance Information Institute (III), 98 percent of land in the western states is already experiencing drought which has brought the threat of wildfires a full month ahead of schedule.
So, getting building insurance is probably in the best interest of people.
Note: Businesses can combine building insurance with commercial property insurance to further protect their belongings from loss, theft, or damage.
What are the Building Insurance Exclusions?
As with all insurance, building insurance has specific exclusions that you should know of. Furthermore, while the exclusions will vary depending on your insurance provider and the type of coverage you choose, some standard exclusions include:
- General wear and tear
- Damage resulting from bad planning and workmanship
- Damage resulting from neglect and lack of maintenance
- Wind and storm damage to gates and plants
- Damage caused by pests and birds
Note: To get a full rundown of what your building insurance covers, consult with a local insurance agent near you.
What you need to know when choosing Building Insurance
Not all building insurance are built the same and share the same features. Some of the most important things to consider while choosing building insurance are:
The type of damage the policy covers
Most standard building coverage will cover damage that resulted from natural disasters, subsidence, and fire. However, it is important to understand that the coverage range that your policy provides can vary depending on your insurance provider.
It’s a good idea to always read your policy thoroughly. Some insurance providers allow you to add accidental damage coverage to your standard policy. An accidental damage coverage will provide you with financial protection for any mishaps like drilling a hole through a drainage pipe or slipping and putting your foot through a wall.
Temporary alternative accommodation
If your building gets damaged due to fire, storms, or floods to a point where it’s impossible to live in, your building insurance covers the cost of somewhere to stay while it’s getting repaired. So, make sure that you know exactly how much you’re entitled to if that were to happen.
No-claims discount (NCD)
As with other types of insurance, your insurance provider might look at you more favorably if you don’t make a claim on your insurance building over a 12-month period. This may result in them reducing your premium.
See if the policy you choose has this feature available. If all things go well, you could save a considerable sum of cash in the long run.
Make it a point to inform your insurance provider to let them know if your building will be vacant for any period of time. Furthermore, if your building is going to be left unoccupied for 30 days or more, special terms and conditions may be needed to keep the coverage valid.
Your insurance provider can refuse to pay out certain claims if you fail to inform them that your building was left unoccupied for a lengthy period.
How can I lower my Building Insurance?
There are a few ways how you can lower the cost of your building insurance.
Perhaps the most effective way for you to lower your premiums is by first receiving quotes from four to five different insurance companies. Make sure that you’ve received the same quotes from the insurance providers and compare their features. See what they’re offering and compare the rates.
Oftentimes, this will allow you to find the cheapest insurance that meets both your budget and needs.
Bundle your insurance policy
Insurance companies might offer bundle insurance packages that combine two or more insurance packages. The upside of these types of insurance is that they almost always come at a discount.
So, if you’re planning on insuring your building and also looking to insure your car, see if your insurance company is offering a bundled package that combines the policies.
Check on your no-claims discount
If you’re lucky enough to have never needed to claim on your building insurance, you could be eligible for a no-claim discount bonus. So, consult with your insurance agent or provider to see how you can claim the bonus.
Oftentimes, you only need to mention it in your insurance form, and the insurance company will handle the rest.
Consult with your insurance agent
You could take matters into your own hand and find the right insurance for you and your building, but it often comes at the cost of a lot of time, money, and effort. Perhaps your best bet at getting the cheapest insurance on buildings is by consulting with your insurance agent.
As professionals, they can assess your situation and offer you a list of the best insurance policies available for you to choose from.
You might also want to choose an independent agent since they can offer you quotes from multiple insurance companies rather than from a single insurance company as with the case of captive agents.
Did you find this blog helpful? Let us know in the comments below.
Frequently Asked Questions (FAQs)
Is Buildings Insurance the Same as Homeowners Insurance?
No, building insurance will only cover the structural component of your home. This includes the roof, walls, windows, and other permanent fixtures of your property. Homeowners insurance, on the other hand, protects both your property’s structure as well as the contents within it.
How much Building Insurance do I need?
When trying to figure out the value of your building, base your calculations on how much it would currently cost to rebuild your house from the grounds up. Also, remember to add the necessary professional fees to the calculations. Make sure that you’re not basing your calculations on your building’s market value.
Do you need Building Insurance for Apartment Buildings?
No, you’re not required to have any insurance for your apartment. However, it’s a good idea to get building insurance if you want to make sure that you have a financial backup in the event of any sort of damage.
If you’re renting an apartment, you should consider getting contents insurance. Contents insurance can cover your personal possessions in the event of theft, loss, or damage from natural disasters, flooding, storms, or flooding.
Can you insure Modular Buildings?
Yes! Modular buildings are built in sections in off-site manufacturing facilities and are transported and assembled on a building site. If you own a modular home, you can get a standard homeowners insurance policy to protect it. Insurance companies consider modular homes in the same light as traditional homes. So, they offer all the same coverage.