Home insurance - the facts

Buildings insurance covers permanent fixtures and fittings such as toilets and fitted kitchens, as well as the structure of the building. Garages, sheds and greenhouses are normally included, as well as garden walls, fences and gates.

How much cover do I need?

Tricky question. The ABI believes that one-quarter of homes in Britain are underinsured or have no cover.

A buildings policy must cover the cost of rebuilding your home. Working out this figure is notoriously inexact, not to mention very difficult for the layman, but the Royal Institute of Chartered Surveyors now offers a calculator to help you do this: calculator.bcis.co.uk.

It is important not to underinsure. If your house is covered structurally for, say, £200,000 and the insurance company thinks a total rebuild would cost more than this figure, it will reduce accordingly any sum it is willing to pay out. Rebuilding is a very expensive process - don't get stung for it by being underinsured.

What am I covered for?

According to the Association of British Insurers (ABI), a standard buildings insurance policy covers you for loss or damage to your property caused by storms, floods, fire and smoke, earthquakes, explosions, lightning, strikes, political disturbances and a range of even less likely events, such as an aircraft crashing on to your house.

There is a strange misconception that insurance policies don't ever pay out for 'Acts of God,' including lightning strikes and freak weather damage. This is not generally the case, but again you must read the exemptions carefully on your policy to avoid a nasty surprise if you have to make a claim.

Some insurance companies offer unlimited cover. This means you don't have to worry about how much cover you need or whether it is adequate. Other insurers offer premiums based on a simple assessment of where you live and the type, age and size of your property.

Accommodation

It's wise to take out a policy that pays for the cost of emergency accommodation, particularly in the case of flood damage, which can make a property uninhabitable for months on end.

Most household policies now cover this expense — up to the policy limit — if you need to move out of your home while repairs are carried out.

Making a claim

First of all, contact your insurer for advice. If necessary, arrange for any temporary repairs to stop damage getting worse. Keep receipts, as these will form part of your claim.

Some policies now offer 24-hour claims helplines. If you are making a claim as a result of a storm that has affected many people, getting the process underway as soon as possible is a good idea as your insurer may have to deal with a high volume of customers.

You'll have to pay the excess. This varies from policy to policy but is usually the first £50-£100 of the total bill.

What they won't pay out on

Exemptions vary from policy to policy, but insurers commonly don't pay out on loss or damage to hedges, fences and gates, and they also won't normally pay out if your home is unfurnished or has been left unoccupied for 30 days or longer.

Subsidence