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Do I have to get buildings insurance from my mortgage provider?

Buildings insurance covers the cost of rebuilding or repairing damage to the structure of your home and you’ll also need it as a condition of your mortgage. Read on to find out more.

Eve Powell
Eve Powell
Updated 24 January 2022  | 3 mins read

What does buildings insurance cover?

Buildings insurance covers the cost of repairing damage to the structure of your home and its permanent fixtures and fittings, or rebuilding your home if it gets destroyed.

It’s designed to cover the full cost of rebuilding your house from the ground up.

Policies vary between home insurance providers, but buildings insurance will typically cover your home for unexpected events like fire, explosions, storms, floods and earthquakes.

It will also include cover for damage from things like frozen or burst pipes, fallen trees, malicious damage and subsidence. Of course, there’ll be exclusions to watch out for, so check the terms and conditions carefully.

Key points

  • It’s usually a condition of your mortgage that you take out buildings insurance
  • It covers the cost of repairing damage or rebuilding the structure of your home
  • You’ll need buildings insurance in place by the time you exchange contracts on your new home
  • Your mortgage provider may offer you insurance, but you can still shop around to get the best deal

Do I need buildings insurance if I’m buying a house?

This depends on whether you’ll need a mortgage to buy your home. Usually lenders will insist you have a buildings insurance policy that would cover your mortgage.

If you’re not taking out a mortgage, buildings insurance isn’t compulsory, but it’s advisable so that you’re covered if your new home was damaged or needed costly repairs in the future.

If you don’t take out this cover, you’ll need to think carefully about whether you’d be able to pay for major repairs or rebuild your home after an event like a house fire.

How much buildings insurance do I need?

You’ll need to be covered for the amount it would cost to rebuild your home from scratch - this is called the sum assured.

To make sure you get the right level of cover you’ll need to value your home as accurately as possible.

The rebuild value isn’t the price you paid for your home and it’ll be less than its current market value. Instead, it will be the cost of things like building materials, labour and any professional expertise you’d need to build your home again.

To help you calculate your home’s rebuild cost you can use a calculator like this one from the Building Cost Information Service, or contact a chartered surveyor. Alternatively, we’ll give you an estimate when you ask us to get quotes.

When do I need to buy buildings insurance?

If you’re buying a home with a mortgage, you’ll be required to take out buildings insurance by the time the contracts are exchanged.

To help make sure everything goes to plan, try to give yourself enough time to compare policies and quotes so that you can get the right cover in place.

Buying buildings insurance by the time you exchange contracts means that if any damage happens to the house between then and your moving date, you’ll still be covered.

Do I have to get buildings insurance from my mortgage provider?

No, unless you’re taking out a mortgage package that comes with buildings insurance, you can buy your insurance from any provider.

Your lender will want you to have cover in place because they need to protect their investment (and your repayments) if something was to happen to your property.

For this reason, mortgage lenders often offer insurance policies, but you’re under no obligation to buy one from them.

It’s possible your lender could refuse the buildings insurance if the insurer isn’t on their approved list, but it’s easy to shop around for an alternative if you need to.

Can I switch insurance providers if I’ve already bought buildings insurance with my mortgage provider?

Yes, once your buildings insurance policy has come to an end you can switch to a new one.

It’s a good idea to shop around as staying with the insurer your mortgage provider recommended could mean that you end up paying more than you need to.

Most policies are for 12 months, so a month before your policy’s due to end you can start to compare quotes and policies from other providers.

If you’re switching away from your lender’s insurance, you’ll need to let them know when you’ll be cancelling your policy with them.

Can I transfer my buildings insurance from my current property to a new one?

This will depend on your provider, but some will let you transfer your buildings insurance from one property to another.

You’ll need to check with your provider first and you may find there’s a small charge for making the change to your policy.

Alternatively, moving house can be a good time to check you’ve got the best deal and the right level of cover for your home. And don’t forget to do this with your contents insurance as well.

Remember that if you need to make a switch before your current policy has ended, you may face a cancellation fee, so you should factor this in if you’re comparing deals.

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