A first-time buyer's guide to buildings insurance

Buildings insurance protects the structure of your home, acting as a financial safeguard in the event of unforeseen damages.

Whether it's damage to your roof after a storm, or a pipe bursts in the attic - buildings insurance can give homeowners the reassurance they're protected financially.

What is buildings insurance and why do first time buyers need it?

Buildings insurance is a type of home insurance that covers the structure of your home, often described as the 'bricks and mortar'.

This includes the walls, roof, ceilings, doors and windows, plus any permanent fixtures like fitted kitchens and bathrooms. It can protect you financially if the property is damaged by events like fire, storm, flood, subsidence or vandalism.

Buildings insurance is different from contents insurance. Contents insurance covers your belongings inside the home. These are the things you would take with you if you moved, such as furniture, clothes, and personal items.

It's common for insurers to offer combined buildings and contents insurance, but they can also be bought separately.

Buildings insurance isn't a legal requirement in the UK. But, if you have a mortgage, almost all lenders require you to have this insurance in place from the day you exchange contracts. The lender has a financial interest in the property, so buildings insurance acts as a security for the loan. If the building were destroyed or seriously damaged and not insured, the lender's investment would be at risk.

Buildings insurance ensures that:

• The property can be repaired or rebuilt.

• The value of the lender's security is protected.

Even without a mortgage, getting buildings insurance is strongly recommended. Without it, you would have to cover the cost of major repairs, or even a full rebuild after events like fire, flood, or subsidence. So, going without cover can leave you financially vulnerable.

When should I get buildings insurance when buying my first home?

You should have buildings insurance in place from the moment you exchange contracts.

When you exchange contracts, the sale becomes legally binding. This means that you're legally responsible for the property, even though you haven't moved in yet. If something happened to the house between exchange and completion (such as a fire, or a burst pipe), you would be financially responsible.

Having buildings insurance in place protects you during this period and ensures the property can be repaired or rebuilt if it's damaged.

Let's take a look at the process for exchanging contracts and completion:

At exchange of contracts

• Both parties commit legally to the sale.

• You typically pay your deposit.

• The property risk transfers to you, which is why buildings insurance must start at this point.

Bewteen exchange and completion

• You don't own the property yet, but you are responsible for insuring it.

• Your solicitor or conveyancer will normally remind you to have the policy active on the day of exchange.

At completion

• The remaining funds are transferred.

• You get the keys and officially become the owner.

• Your buildings insurance simply continues. It doesn't need to change unless you want to adjust the level of cover or add extras (like contents insurance once you move in).

How much buildings insurance do you need?

It's important to know that you do not insure your home for its market value. Instead, your buildings insurance should cover the full rebuild cost of your property.

Insurers base their cover on the cost to rebuilt the home from scratch, which is usually lower than the market value. This ensures you're not overpaying for cover you don't need.

The rebuild cost takes into account everything required to restore the property if it were completely destroyed. This includes the construction materials, labour costs and surveyor fees. Your insurer uses this figure to set the maximum amount they'd pay out, so getting it right is essential.

To work out how much buildings insurance you need, you can use a rebuild cost calculator. These tools estimate rebuild costs based on your home's size, type, and construction materials. If your property is unusual, listed, or heavily modified, you may need a professional survey for a more accurate assessment.

Many insurers offer combined buildings and contents insurance, which can often be cheaper than buying separate policies.

What does buildings insurance cover?

Buildings insurance covers the structure of your home:

• Fire damage: Including repairs to walls, ceilings and structural elements.

• Flood damage: Drying out and repairing floors, walls and permanent fixtures.

• Storm damage: Such as fallen trees damaging the roof or tiles being blown off.

• Subsidence and ground movement: Including underpinning and structural repairs.

• Burst pipes and water leaks: Damage to the structure and fixtures caused by escape of water (policy-dependent).

• Impact damage: For example, a vehicle hitting your home.

• Vandalism or malicious damage.

• Permanent fixtures and fittings: Such as fitted kitchens, built-in wardrobes, bathroom suites and integrated appliances.

• Outbuildings and boundaries: Garages, sheds, fences, and walls (depending on your policy).

The following incidents are uusally excluded from a typical buildings insurance policy:

• Wear and tear or gradual deterioration.

• Routine maintenance issues like ageing roofs or mould caused by poor ventilation.

• Damage caused by pests. For example, damage caused by rodents or insects.

• Poor workmanship or faulty design.

• Accidental damage, unless specifically added as an optional extra.

What about buildings insurance for a new build?

Just like with any property, you'll need buildings insurance from the moment you exchange contracts, as it's a standard requirement for almost all mortgage lenders.

A builder's warranty provides protection only for specific structural defects, usually for 10 years. It's worth noting that it doesn't replace buildings insurance.

Buildings insurance is essential because a builder's warranty won't pay out if, for example, a fire destroys your kitchen or a storm damages your roof.

Builder's warranty covers

• Major structural defects that arise due to poor workmanship or materials.

• Issues with the foundations, walls, roof structure and load-bearing components.

• Some warranties include a short initial period (often 2 years) covering small defects like plumbing or electrics.

Buildings insurance covers

• Accidental or sudden damage to the structure caused by events like storms, fire, flooding, impact or escape of water.

• Permanent fixtures such as the fitted kitchen, bathroom suites, built-in wardrobes and integrated appliances.

• Outbuildings, garages, driveways, gates and fences (depending on the policy).

What other insurance should a first-time buyer consider?

It's worth knowing that buildings insurance isn't the only cover to think about when buying your first home. Our first-time buyer insurance checklist can help you work through what you'll need:

1. Buildings insurance

• Covers the structure of your home (walls, roof, floors, permanent fixtures).

• Protects against fire, flood, storms, subsidence, and other sudden damage.

• Required by almost all mortgage lenders from the point you exchange contracts.

2. Contents insurance

• Protects personal belongings like furniture, electronics, clothes and appliances.

• Covers theft, fire and flood. Accidental damage is typically an optional extra for home insurance policies, so it's worth looking into if you think you'll need it.

• Can be combined with buildings insurance for convenience and cost savings.

3. Life insurance

• Provides a lump sum to dependents in the event of death.

• Ensures your mortgage can be repaid and the family home is secure.

4. Mortgage protection insurance (mortgage payment protection)

• Covers monthly mortgage payments if you're unable to work due to illness, injury, or redundancy.

5. Income protection insurance

• Pays a portion of your income if long-term illness or injury prevents you from working.

• Helps cover mortgage and living costs beyond short-term events.

6. Home emergency cover

• Covers urgent problems like boiler breakdown, burst pipes, electrical failures or pest infestations.

• Provides quick access to repairs without large out-of-pocket costs.