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Everything you need to know about building insurance

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Est read time 3 Minutes Published on 24th Feb 2020

There's no clue of doubt that our lives revolve around our homes. A home offers shelter and comfort to you and your family members. Buying a house and furnishings requires heavy financing, sometimes even parting with your life savings. However, in case of an untoward incident, such as damage to your property or materials in it, there is both monetary and emotional loss. While emotional losses are irrecoverable, you can do your best to cover financial losses to avoid extreme economic distress. This is where home insurance, particularly buildings insurance, can come handy.   Buy building insurance to protect your property!

What is building insurance?

Buildings insurance offers protection to your house, in the event of any damage to the physical structure, including permanent fittings.

Typically, the definition of building includes the following:

• Physical structure such as roofs and walls

• Doors and windows

• Ceilings

• Fittings such as kitchens, bathroom suites, and others

• Outbuildings such as your shed

• Portable electronics

Building insurance is a type of home insurance that covers the structure and permanent sittings. Home insurance may cover both building and contents.

What does building insurance cover?

Recent natural calamities in our country, such as floods in Kerala, Nisarga storm in Mumbai, and Cyclone Amphanin West Bengal, have given enough indicators to us that we need to be prepared for the worst, in the event of any damage to our houses. 

*Type of damages, building insurance will usually cover:

• Fire

• Vandalism

• Explosions

• Burglary

• Lightning

• Cyclones

• Electric breakdowns

• Aircraft damage

• Landslides

• Accidental damages

Apart from these, building home insurance can also cover alternate accommodation expenses such as rent and brokerage, moving and packing, etc. Talk with your insurance agent about the types of damages the buildings insurance will cover, as every policy will have different terms and conditions.

Factors your home's rebuild value could be affected by

Some of the factors that may affect the rebuild value of the house are as follows:

• Age of the house

• The construction style of your house

• Age of the roof and material, which is made of

• Type of infrastructure

• Location of the house

In case your fittings are outdated, there is a higher chance that you may end up paying a higher premium. If you are located in a place where natural calamities are highly frequent, the odds are that your premium will be higher.   

How much should I insure my building for?

An important point to note is that you should ensure the cost of rebuilding your house, irrespective of the market value. The amount should be enough to cover your house costs and its contents. Some policies also cover renovation costs or extension costs. Make sure you discuss these pointers with your insurance advisor or agent. Keep track of your assets by maintaining an inventory and noting down the value of your items.

Also, while calculating the building's cost, do consider your lifestyle and make sure you cover enough costs to maintain your current lifestyle.

Also, these parameters make a difference while determining the amount of insurance:

• Period of construction

• Construction quality

• Gauge value of new items in bathrooms, garages, security systems

Conclusion

To sum up, buy building insurance to secure your property against any unforeseen damages. Or, you could also take up a comprehensive  home insurance policy that covers your residential property in dire times. Compare different insurers and make a choice that suits your wallet as well as justifies your lifestyle requirements. Make sure you review your policy every year and make changes if required. Apart from this, consider that prevention is always better than cure, and it is best to check the building structure and repair damages in time to avoid any disaster, in the future.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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