What buildings insurance actually covers
Buildings insurance pays to repair or rebuild the physical structure of your home after an insured event. That includes the main walls, roof, floors, ceilings and permanent fixtures such as fitted kitchens and bathrooms. Most policies also extend to permanent outdoor structures like garages, boundary walls, drives and fences, though limits for these vary.
Standard cover protects against fire, smoke, lightning, explosion, storm, flood, escape of water from burst pipes, subsidence, falling trees, vehicle impact, vandalism and theft or attempted theft. Many policies bundle in alternative accommodation cover, which pays for somewhere to live while your home is repaired after a major claim.
It is not the same as contents insurance. The simple test: if you tipped the house upside down, anything that stays put is buildings, and anything that falls out is contents. Carpets, curtains, furniture, electricals and personal possessions all fall under contents cover, which you arrange separately (often as a combined policy at a discount).
Have cover live for exchange day
If the property is damaged between exchange and completion, you are liable even though you do not yet own it. Arrange buildings insurance to start on the exchange date so you are never exposed during that gap.
Buildings vs contents insurance at a glance
The two policies cover different things. Most owners need both.
| Feature | Buildings insurance | Contents insurance |
|---|---|---|
| What it covers | The permanent structure and fixtures | Movable belongings and possessions |
| Required by lender | Yes, from exchange | No, but strongly advised |
| Based on | Rebuild cost | Value of your possessions |
| Leasehold flat | Usually arranged by freeholder | Your responsibility |
| Typical extras | Alternative accommodation, outbuildings | Accidental damage, away-from-home cover |
How the rebuild cost is calculated
Premiums are based on the rebuild (or reinstatement) cost, not the price you paid. Rebuild cost is what it would take to demolish and reconstruct the property from scratch, including labour, materials, professional fees and debris clearance. It is almost always lower than the market value because it excludes the land.
Your mortgage valuation or RICS survey usually states a rebuild figure. If it does not, you can use the free BCIS rebuild calculator from the Royal Institution of Chartered Surveyors, or commission a surveyor for an unusual or listed property. Underinsuring leaves you exposed because insurers can scale down payouts under the 'average' clause, so it pays to get the figure right.
What pushes premiums up
- A flood-risk or coastal location, or a history of subsidence in the area.
- Non-standard construction such as thatch, timber frame or concrete.
- Listed status, which can require like-for-like materials and specialist trades.
- A high rebuild cost relative to standard homes (large or period properties).
- Previous claims at the address or a low chosen excess.
Arranging cover step by step
Confirm the rebuild figure
Take it from your survey or valuation, or use the BCIS calculator for an accurate estimate.
Get quotes early
Compare standalone insurers and combined buildings and contents deals at least a week before exchange.
Set the start date to exchange
Tell the insurer to begin cover on your planned exchange date, not completion.
Send proof to your conveyancer
Lenders often want to see the policy schedule before they release funds.
Review yearly
Rebuild costs rise with construction inflation, so update the sum insured at renewal.