What is Building & Contents Insurance?

The insurance industry is full of jargon, so the following are some commonly used terms to describe the types of Building & Contents insurance products that are available.

The Financial Services Authority (FSA) distinguishes types of Building & Contents insurances as General Insurance.

Building & Contents insurance (B&C) are combined protection policies which are also known as Home insurance or Household insurance. They can also be bought as separate policies of Building insurance and Contents insurance.

Home Building and Contents insurance provides lump sum funds for replacement or repair of household property or goods.

Why would I need Building & Contents Insurance?

B&C should be considered for earners and non-earners who may at some time in the future find themselves requiring funds for replacement or repair of household property or goods from damage caused by fire, flood or subsidence.

Whilst Buildings insurance is required by lenders of mortgaged properties, you are not required to take out a policy offered by the lender. Provided a valid Buildings cover is in place for at least the reinstatement value (rebuilding cost) of the property, mortgage lenders will accept the policy. The reinstatement value is not the same as the current value of the property, which may be lower or higher than the reinstatement value.

Contents insurance is not a requirement by lenders of mortgaged property, although in most cases it is usually more cost efficient to purchase the Buildings and Contents cover from the same insurance provider.

Contents insurance is designed to cover the replacement costs of damaged items such as furniture, electrical goods and other personal items such as clothing. If you reside in a property that is not owned by you, such as a tenant, then you may need to consider Contents insurance as a separate policy.

Building & Contents insurance is also provided for Landlords, although they will have special conditions attached.

How much will B&C Insurance pay me on a claim?

The purpose of B&C is to provide payment for the loss of items as covered by the benefits of the policy. Usually a choice of plans are offered providing options of comprehensive to budget plans, with excesses reflected in the cost of monthly premiums. Excesses will tend to be higher on budget plans.

How do I pay for B&C Insurance?

Once the benefits you require has been determined and plan exclusions considered the appropriate plan can be selected. This will determine your monthly or annual lump sum payments or premiums for protection under the policy or cover which will be offered to you by the insurer’s underwriter after they have reviewed a completed questionnaire relating to your property and previous claims history.

The monthly or annual premiums are reviewable every year depending on the insurance provider i.e. the insurance company underwriting the policy.

How should I apply for B&C Insurance?

The first and most important step after you have decided you may have a need for B&C insurance is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable B&C plan is for your particular circumstances after assessing your needs we make an application and complete an underwriting questionnaire on your behalf to take out a Building & contents insurance policy based on how much you can afford and the type of benefit required to match your needs.

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles by accessing the following at

the Financial Service Authority (FSA) consumer guide available on their website at http://www.moneymadeclear.fsa.gov.uk/products/insurance/types/protecting_your_possessions.html

and to find out how much cover you need for buildings insurance use the calculator on the Building Cost Information Service website at http://www.bcis.co.uk/HomeInsurance.html