Buildings Insurance

Everyone needs buildings insurance to cover their home in case the building is damaged or destroyed. While you have a mortgage, the lender will almost certainly insist that you have this cover.

Some lenders insist that you take out cover they arrange. This is called ‘tied’ insurance. Some insist you take insurance but don’t insist that you take their policy. This is called ‘compulsory’ insurance.

Many let you shop around for your own cover but charge an administration fee for checking the cover is enough. Some insurance providers will pay the fee for you.

Other lenders leave you free to choose your own insurance and do not make a charge.

Look at section 9 of the key facts mortgage illustration (KFI) to see if you have to arrange tied or compulsory insurance, whether you have to pay an insurance charge, and what optional insurance the lender may offer.

You may need to know the ‘rebuilding cost’ of your home. Here is a useful link to the ABI house rebuilding cost calculator: http://abi.bcis.co.uk/