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Buildings Insurance

The easiest way to cover your new home is by getting the cover through your mortgage lender. But if you do this, you could be paying through the nose. You're better off shopping around. By going onto the internet you can save up to 40%. If you have an old or unusual home your buildings insurance is likely to be costly so you might want to visit a broker who can scour the market to find you the best deal. Other factors also determine your monthly premium. Building and labour costs are higher in London so premiums are higher there. Northern Ireland, on the other hand, has the lowest building costs. The age and type of house you have will play a part. It's harder to rebuild an older house, for example.

Environmental factors play a huge part. Subsidence, for example, bedevils many parts of South East England, but does not lurk in the North of England and Scotland. Most troubled by it are Victorian and Edwardian homes built on clay subsoil that stretches across southern and easterly England. Aberdeen, by comparison, built on rock-solid granite, has the lowest buildings insurance premiums in the country.

Again, flooding torments postcodes in the Severn Valley and the Thames Valley where you'll find premiums are dear. Certain home buyers in East Anglia also face the prospect of having to pay higher than normal for their buildings insurance due to the problems with coastal erosion.

To check you don't end up buying in a potential hazard spot it might be worth researching your prospective new postcode. You can do this at websites such as www.environment-agency.gov.uk. It might be worth having a proper survey carried out or simply talking to your prospective new neighbours.

Buildings insurance protects you against structural damage inflicted on your home and permanent fixtures inside it such as baths, fitted kitchens and toilets. Any items that can be picked up and moved will, if you have it, come under contents insurance.

Ins and Outs

Buildings cover usually extends to include garages, sheds and importantly, accidental damage is usually included in a policy. But it might not include features such as boundary walls, fences, gates, paths, drives and swimming pools. You also won't be covered if your home is damaged by, in insurance speak, 'a gradually operated cause', such as frost and wet and dry rot. If you want extensions to what you are covered for your premiums will go up.

Your buildings insurance will be either 'sum insured' or 'bedroom rated'. The first entails you working out how much it would cost to rebuild your home. The figure you arrive at is the amount of money for which your home is covered and the most your insurers will cough up. It is your responsibility to get the sum right but it is tricky. If you over calculate you could be needlessly paying too much each month, under calculate and you could leave yourself short if anything disastrous happens to your house. You must also make sure that the sum insured is kept up-to-date to allow for changing rebuilding costs - like an extension. You can get help, however. The information you need should be found in the valuation report carried out on your prospective new home. Chase your lender for this if they haven't given you a copy. The ABI, meanwhile, has an online calculator that will help you work out the amount of cover you need. You could be lucky and get help with your calculations from the insurance company itself. Failing all this, you can hire a member of the Royal Institution of Chartered Surveyors to prepare a professional Rebuilding Cost Assessment.

A 'bedroom-rated' policy is a little easier. Instead of calculating how much it would cost to rebuild your home, you simply tell your insurer how many bedrooms you have. They will then work out your cover on this basis.

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