Is Buildings Insurance the Same as Home Insurance? Expert Guide

Buildings insurance protects your property, but is it the same as home insurance? The building insurance vs. home insurance conundrum can cause you trouble, so it’s essential to understand the difference to ensure you’re covered by the best home insurance policy should disaster strike.

That’s why we’re here to help. In this guide, we explain the difference between buildings insurance and home insurance, as well as what home insurance covers and whether home insurance is mandatory.

Buildings insurance covers the cost of repairing or rebuilding the structure of your home if it’s damaged due to storms or other events. A robust buildings insurance policy should protect your property's walls, roofs, floors, and ceilings. Permanent fixtures, such as windows, doors, and pipework, are covered, and fittings, like wardrobes and cupboards, should also be covered.

Buildings insurance covers damage to the structure of your home caused by unforeseen events such as the following:

Fires

If a fire damages your home, your buildings insurance should cover repairs, including smoke-related issues.

Storms and flood

High winds and heavy rain can wreak havoc on a property. Rising water levels can also pose a flood risk for homes near rivers. In these cases, buildings insurance should cover any damage caused.

Escape of water

Ingress (water intrusion) caused by burst pipes or leaking central heating systems can cause significant issues if not spotted early enough. Buildings insurance will cover repairs provided they’re not due to poor maintenance.

Subsidence

If the ground beneath your home moves due to subsidence, heave, or landslides, your insurance should cover damage repair and any cracks or instability.

Crime

Theft and vandalism from forced entry are usually covered.

Impact damage

Most home insurance policies cover damage from falling trees or branches. They also include accidental damage from other objects hitting your property, such as vehicles or aircraft.

Not covered

Note that damage due to normal wear and tear or poor maintenance isn’t typically covered. Accidental damage and legal cover aren’t usually a policy standard; however, many providers offer these options as add-ons.

Buildings insurance isn’t the same as home insurance. It’s a specific type of home insurance that covers structural damage but not the home’s contents. Home insurance, in general, is an umbrella term that refers to any kind of cover you might buy to protect your home.

However, most providers offer comprehensive coverage in one home insurance policy for both buildings and contents insurance.

While the distinction may seem pedantic, it’s essential to understand what your home policy coverage includes.

Buildings insurance isn’t mandatory by law in the UK. Homeowners are welcome to take the risk of not having insurance, though it’s highly inadvisable. Costs associated with repairing or rebuilding damaged property can escalate to such eye-watering amounts that even the super-rich rarely purchase a home without insurance.

However, prospective homeowners applying for a mortgage typically must purchase buildings insurance for loan approval. It’s standard procedure to show proof of your buildings insurance before your mortgage lender will release the funds.

Home insurance is a catch-all term for any insurance protection for your home. It commonly refers to a combination of buildings and contents insurance, but that’s not always the case. Some people use ‘home insurance’ when referring solely to buildings insurance, for example. Be aware that the cheapest home insurance doesn’t always cover both buildings and contents insurance.

Because home insurance is an umbrella term that typically refers to buildings insurance, contents insurance, or both, your coverage depends on the type of policy you choose.

Contents insurance covers your home’s belongings and valuables. A buildings insurance policy covers its rigid structure––walls, roofs, fixtures and fittings.

Whether you have buildings insurance, contents insurance, or both, home insurance doesn’t usually cover general wear and tear or deliberate damage. Certain high-risk events (flooding in flood-prone areas, for example) may also be excluded.

Contents insurance covers your personal belongings in the house. A typical contents insurance policy covers repairing or replacing any item damaged or lost due to an unexpected event, including theft, fire, flood, accidental damage, and sometimes loss.

If you tip your home upside down, anything that falls out should be protected by contents insurance. Covered items include furniture, electronics, clothing, jewellery, and white goods. For an additional fee, insurers may also offer protection for goods lost or damaged outside your home, such as bikes or laptops.

No, contents insurance isn’t the same as home insurance. Home insurance is a broad term that can sometimes incorporate contents insurance, but the terms aren’t interchangeable.

Whether you need both buildings and contents insurance depends on the ownership status of your home. If you’re the owner and live in your home, your best bet is to have both covers. You can purchase separate policies, but a combined policy is typically better value.

If you’re a landlord, buildings insurance is essential to protect the structure of your property. However, contents insurance is only necessary if you provide furnishings. Otherwise, insuring the property’s contents (in each flat) falls on the tenants. By the same rationale, renters don’t need buildings insurance since they don’t own the building (a landlord living in a unit is not a renter).

Now that you understand the difference between home insurance types, you’ll know how to choose the right policy.

Based on your ownership status and the required protection level, assess whether you’ll need buildings insurance, contents insurance, or a combined policy. When comparing policies, check exclusions carefully to understand what is and isn't covered. Also, consider policy add-ons such as legal expenses, accidental damage, or home emergency cover.

Lastly, if you're wondering how much house insurance is, the good news is that policies are available to suit most budgets. You can also spread the cost over the year if you'd prefer not to pay a lump sum, although that arrangement is usually more expensive.

Outbuildings like sheds and garages are usually protected when located within your property’s boundary. However, some policies only cover buildings physically attached to the main property, so check your policy carefully.

Paying a higher excess in the event of a claim is the easiest way to reduce your home insurance premium. Paying a one-off annual fee rather than monthly instalments will also reduce the overall cost. In addition, insurers will look favourably at improving your home’s security features when calculating your premium.

Underinsuring your property means your home is insured for less than its actual replacement cost. In the event of a claim, your insurer will pay only the value stated in your original application, which can leave you short of the costs required for repairs or replacements. To avoid this scenario, regularly review your policy to ensure the coverage reflects the current value of your property and possessions.

If you work from home you may need additional cover. Standard home insurance policies usually cover office equipment like desks, chairs, and computers. But anything more––such as industrial equipment or high quantities of stock––may require specific cover, such as liability insurance.