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Household Buildings insurance

House insurance, also know as buildings insurance, is basically designed to cover the bricks and mortar ie: the fabric of your home against the insured risk happening.
The best example of this is a fire. If a fire rips through your home then, subject to you being insured, you would make a claim on the insurance and the Insurance Company would pay to put the property back in the condition it was prior to the incident. 
It is important to note that you should always ensure that you have adequate cover for the rebuild value of the house. Failure to do this can result in any claim not being met.

It is a common misconception that the property is insured its market value. This is incorrect, the reason for this is the insurance needs to cover the cost of reinstatement ie to re-build the property, as such this figure can wildly differ from the actual properties value.

Example 1

2 Bed Mid Terrace North of England market value approx £35,000
However this property could easily cost £70,000 to £80,000 to re-build

Example 2

5 Bed Detached Property south of England open market value circa £800,000
This property could easily have a re-build value of only £250,000

What these two examples demonstrate is, the open market value of a property bears no relation to the re-build value, please remember this when calculating your insurance because for the reasons above this could invalidate your cover altogether.
Finally the risks covered. It is always important to check what cover you buildings insurance gives you especially when you are in a high risk area.

A topical example of this is if you live in an area that is prone to flooding you should make sure that your policy gives you that valuable coverage. However don't get your hopes up if you are in a high risk area it is likely that the insurer will be aware and cover could be restricted.

Do not be tempted to keep information like this secret from the Insurance company as this is classed as non-disclosure and can invalidate your insurance cover altogether. This can also be said for information disclosed on your survey report if you are aware of information from your surveyor that could affect the integrity of the property it is important to tell the insurer because again if they find out that you knew and you failed to disclose you might not be insured at all.


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