Since there are various types and levels of building insurance, it is important to closely examine the terms and conditions to determine the structures that are covered and excluded under different policies. You would also have to take into account the worst case scenario and how much it would cost to rebuild your home from the ground up if it should be totally destroyed. You would also need to take into account the cost of other factors such as clearing the area to rebuild.
Typically, a building insurance covers the main structure of your home, the garage, and outbuildings, if they are listed in the deeds. Buildings insurance would usually also protect such as outer buildings, pools, garages and patio furniture, but watch out for exclusions as they can be difficult to spot in the small print. Many people now have solar panels and wind turbines, they're usually covered too, as are your fixtures and fittings. Usually, a policy will cover damage caused by fire, vandalism and theft at least; however you would need to check the small print to find out if your home was covered for what are classed as natural causes such as storm and flood damage.
Sometimes these have to be added onto the policy as extras particularly if you live in an area prone to flooding or earthquake. If the property is going to be unoccupied for more than 30 days then check with your insurer as it increases their risk. Pollution from outside sources is unlikely to be covered. If you are doing structural work to your property then check the builder has insurance, your home building insurance will not cover you if the building collapses during the process.
A building insurance normally covers such damages caused by fire, smoke, explosion, lightning or earthquake, riots, civil commotion, labor and political disturbances or strikes, malicious damage or vandalism, storm or flood, impact or collision, escape of water or oil, and theft or attempted theft. However, you need to check if these are covered under the agreement, or if any of these are excluded. Depending on the policy of each insurer there is a chance that some of these risks are excluded from the contract. Or you need to specifically ask the insurer to include those risks you want to cover. These risks, such as floods or storm, may be more common in your area.
Claims under buildings insurance policies can range from the relatively minor to those of such major proportions that the whole property needs to be rebuilt. For this reason, it's important to ensure that the home is insured to the full cost of rebuilding it. Depending on the age and location of the property, this is not necessarily the value of the existing building, but the actual cost of building a new one on the same plot of land. Included in the insurance valuation there should also be provision for loss or damage to related buildings and structures such as the garage, patios, fences, swimming pools, paths, kennel, and other similar structures outside.
Another point to keep in mind while buying a policy is to consider changing circumstances in the future. A rebuild valuation one year is likely to be different in a few years time, so it could be worth reviewing the buildings insurance to ensure that it accurately reflects current valuations. Some policies will include an automatic increase in the valuation in line with the prevailing rate of inflation, which can help to keep the buildings insurance up-to-date.
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