Buildings insurance is a form of insurance that is usually included in an overall house insurance package. It is designed to cover you financially if you sustain damage to the fabric of your house, that is, the bricks and mortar and anything that is fitted inside and cannot be removed.
Buildings insurance, therefore, has to cover the complete rebuild value of your home. The rebuild value is often drastically different to the sale value of your home and usually significantly less, therefore, in order to accurately assess the value of your house for insurance purposes you will need to get a surveyor in, rather than an estate agent.
Many people forget this if they are making improvements to their home. Something as simple as a newly fitted kitchen or bathroom may make a significant different to both the rebuild value and the resale value, and an extension will make an even bigger difference. People donï¿½t often consider the rebuild value of their home, why would they? But if you do have an extension built then you need to make sure that you update your buildings insurance.
If you don't, the result can be as severe as your insurance policy being voided. Insurance is calculated on the value of your home balanced against the likelihood of a claim being made, therefore, if your extension or new bathroom makes it more likely that you will make a claim (if for no greater reason than there are more tiles in your roof and therefore they are more likely to fall off) then you may find that your policy does not offer the protection than it should.
If you are making a change to the garden, for example having a swimming pool installed, or building something like a garage, you should also notify your insurance company. They may or may not cover such a feature and if they don't, it's important that you have insurance. If your garage is a separate building to your house, you may wish to take out an insurance policy just for the garage and its contents rather than amalgamating it into your home insurance policy.
Insurance is an expensive, but necessary financial product, and in the chaos of building an extension to your property it can sometimes be forgotten.
Having a larger home will most likely raise your insurance premiums; you can however make sure that you get the best deal possible, so when you begin shopping make sure you do your research and keep an eye open for any special rates. Do bear in mind however that however temptingly cheap a policy looks it's not worth sacrificing your level of protection too much for the sake of a few quid saved.
One of the most reliable ways of paying less is by buying a combined contents and buildings policy.