Protecting your property

Around six million households in the UK are throwing themselves open to severe financial loss in the event of burglary or some other nasty occurrence. Building insurance provides varying levels of cover against such unhappy events.

Homeowners should have cover for both their building and the contents, though leaseholders in a block of flats often have a shared buildings insurance policy which is normally sufficient. Landlords need to have buildings insurance and contents cover, though the contents element may be limited if the property is let unfurnished or part furnished.

Who should have it?
Every homeowner should have a buildings insurance policy. Most lenders will insist that you have one in order to obtain a mortgage. This is to ensure that there is no chance that the house they are lending you money to buy cannot get destroyed without sufficient compensation to either rebuild it to the same standard or repay the mortgage.

Many people who buy leasehold property do not need are covered by a group policy for the whole building. This will not include your contents and you should examine it closely to ensure that you do not require additional cover.

Applying for coverage

To be able to offer you a quote, the insurer will want to know a great deal about the property you own. They will ask about the construction date and materials for the building - whether it is modern brick and tile or nineteenth century stone and slate will have an effect on your premium.

Not all lenders will provide a mortgage for all types of property, and different insurers sometimes have restrictions on the type of building that they will insure. Some may refuse to cover the more unusual property types that exist in the UK, such as prefabricated buildings or thatched cottages.

Insurers also need to know a little about the local lie of the land. If you live in a village built entirely on marshland or a severe flood-risk area, you may find that you end up paying a substantial premium for your cover, if you can get it at all.