Building insurance (or property insurance) protects the structure of your building from damage caused by fire, weather, theft, and other risks. Unlike home contents insurance, which covers belongings, building insurance covers the physical structure. This guide provides seven essential checks for ensuring your building has the right coverage.

Why Building Insurance Matters

Building insurance is critical for property owners, landlords, and homeowners. It protects your investment and prevents financial ruin in case of major damage. Without building insurance, you could face:

• Tens of thousands in repair costs.
• Liability for injuries on your property.
• Financial loss if your property is uninhabitable.
• Loss of rental income.

Check 1: Understand What Is Covered

Building insurance typically covers the physical structure, including:

• Walls – External and internal walls.
• Roof – Roof structure and covering.
• Floors – Flooring and foundations.
• Fixtures – Built-in kitchens, bathrooms, cabinets.
• External structures – Garages, sheds, fences.

Note: Some policies also cover fixtures (e.g., plumbing, electrical) and outdoor structures (e.g., driveway, landscaping).

Check 2: Choose the Right Coverage Amount

Your coverage amount should reflect the cost to rebuild the building, not its market value.

Factors in Rebuild Cost:

• Square footage.
• Quality of materials.
• Local construction costs.
• Building regulations.
• Special features (e.g., historic status).

Action Step: Use a professional building cost estimator or get an appraisal every 3–5 years.

Check 3: Understand Exclusions

Building insurance has exclusions you need to understand.

Common Exclusions:

• Flood damage (requires separate policy).
• Earthquake damage (requires separate endorsement).
• Wear and tear.
• Neglect (lack of maintenance).
• Intentional damage.
• War and terrorism (may require separate coverage).

Action Step: Read the policy wording to understand exclusions and purchase additional coverage if needed.

Check 4: Review Your Deductible

Your deductible applies to building claims. Choose a deductible you can afford.

Practical Tip: Consider your financial situation and ability to pay the deductible in case of a claim.

Check 5: Understand Valuation Methods

There are different valuation methods for building insurance.

Recommendation: Choose rebuilding cost coverage for the most protection.

Check 6: Consider Additional Coverages

You may need additional coverage for specific risks.

Action Step: Evaluate your location and risks to determine if additional coverage is needed.

Check 7: Review Your Policy Annually

Building insurance needs change over time. Review your policy annually.

What to Check:

• Has the rebuild cost changed?
• Have you made renovations or additions?
• Has your area’s risk profile changed (e.g., flood zone)?
• Are there new discounts available?
• Can you get a better rate elsewhere?

Building Insurance Quick Reference

Frequently Asked Questions

Q: Is building insurance required by law? A: No, but lenders usually require it if you have a mortgage. Landlords may also require it.

Q: What is the difference between building and contents insurance? A: Building insurance covers the structure. Contents insurance covers belongings inside the building.

Q: Can I bundle building and contents insurance? A: Yes, most insurers offer a combined policy, often at a discount.

Conclusion

Building insurance is essential for protecting your property investment. Use these seven checks to choose the right coverage, understand exclusions, and avoid costly gaps. Review your policy annually and update it as your building changes.