1) Personal policies. These will cover residential buildings, private dwelling houses whether they be detached, semi detached bungalows or flats in either purpose built or converted buildings. If a property is rented out to tenants, most insurers will now cover these risks under a personal policy known as a landlord or buy to let insurance, if of course the dwelling house is used for residential purposes. Much confusion surrounds the insurance of flats in blocks, in essence they should be insured by the freeholder of the property under a block policy. However, many flats ,particularly in Scotland are insured on an individual basis and many other people in the United Kingdom have taken it on themselves for a variety of reasons to insure their own flat. We have more on this topic on our flats page.
2) Commercial Insurance. Commercial building insurance will cover a variety of property that is used for business purposes. These can either be owner occupied or owned by landlords that are renting to tenants. Types of risk include, shops, offices, factory premises, in fact any type of building where a commercial activity is carried out. This sector of the market is usually extended to include property such as sports centres, schools, hospitals and buildings that are used for religious worship.
Insurance Regulation - although policies will vary from one insurer to another, the core covers, the way that cover is arranged and the way that any claims are handled will be fairly similar. In fact since the selling of general insurance became regulated by the financial services authority (mostly shortened to FSA); the sales process should not vary too much from insurer to insurer. Certainly you should be given a Key Facts document which outlines the basis of the cover and will enable you to make an informed decision as to the suitability of any particular insurance product. As well as this document , you should be presented with a terms of business agreement from the product provider, this will alert you to who you are dealing with.
Definition of Residential Home Insurance - this can often cause confusion, how do you actually define a building. In the first instance and for insurance purposes, it means the structure of the building itself.; the foundations, walls, floors, doors, windows, roof, plumbing, windows, fixed electrical wiring, decorations and it’s permanent fixtures & fittings. This would include such items as fitted kitchen units, fitted bedroom furniture, toilets, baths etc. The general rule is, anything immovable that would be left behind on removal is treated as buildings, and everything else is treated as contents. There are of course some grey areas, fitted carpets are generally treated as contents even if you would leave them behind, it’s best to check on each occasion with the insurer you are considering using. Buildings also extend to include; outbuildings, garages, greenhouses, sheds, paths, drives, walls & patios. Fences and gates are also including under the definition of building but some insurers make exclusions on the cover so it is best to check on the Keyfacts document, regarding the cover you are going to receive.
The Basis of cover - although building insurance will vary from insurer to insurer, the basic or “core" covers tend to be fairly similar. Certainly if you are borrowing money to buy a building, the lender will require their interest noted to satisfy the contract rights act and protect their investment, they will require a minimum amount of perils to be covered as specified in their lenders handbook. Most building policies will comply with the lenders hand book but you should ask if you are in any doubt as your lender may want a declaration signed.
Finding Adequate Cover - care is always needed to study building insurance policy exclusions, particularly if you live in a flood area or your building has suffered previous subsidence problems. Any significant exclusions of cover should be pointed out by the insurance arranger prior to you accepting insurance cover. Of course when arranging a building insurance policy, you must give the insurer all the correct underwriting information to enable them to accurately give you a quotation. If you property is located on a flood plain or has a history of subsidence or is of non-standard construction, these are all deemed to be material facts and need to be disclosed to the insurer.
