Buildings Insurance is a type of insurance policy that provides financial protection for the structure of a building against risks such as fire, flood, storm damage, subsidence, and vandalism. It typically helps cover the cost of repairing or rebuilding the structure of your property, including fixtures and fittings like walls, roofs, floors, ceilings, and permanent features such as kitchens and bathrooms.
In many cases, buildings insurance is used to cover commercial buildings, while homeowners insurance is used for residential properties. The terms "buildings insurance" and "homeowners insurance" often refer to similar structural coverage but are usually differentiated based on the type of property they protect.
In the United States, homeowners insurance typically combines coverage for both the structure of the home (dwelling) and the personal belongings (contents) within the home into a single policy. This combined coverage is commonly referred to as homeowners insurance.
A standard homeowners insurance policy may include several types of coverage such as:
- Dwelling coverage: Helps protect the structure of the home itself, including the walls, roof, foundation, and attached structures like garages and decks, against covered perils such as fire, windstorm, hail, and vandalism.
- Personal property coverage: Helps cover personal belongings inside the home, such as furniture, electronics, clothing, and appliances, against covered perils both inside and outside the home.
- Liability coverage: Typically includes personal liability coverage, which can help protect you financially if someone is injured on your property or if you accidentally damage someone else's property and are found legally responsible.
- Additional living expenses (ALE) coverage: If your home becomes uninhabitable due to a covered loss, ALE coverage can help pay for additional living expenses such as temporary housing, food, and transportation while your home is being repaired or rebuilt.
Frequently Asked Questions
What is the difference between buildings insurance and homeowners insurance?Buildings insurance generally refers to coverage for the physical structure of a property. Homeowners insurance usually includes buildings coverage plus additional protections, such as personal property, liability, and additional living expenses, in a single policy. Does buildings insurance cover my belongings inside the property?Pure buildings insurance typically covers only the structure and permanent fixtures. Coverage for personal belongings, such as furniture and electronics, is usually provided under a separate contents or personal property section of a homeowners policy. Is buildings insurance required by law?Buildings or homeowners insurance is not always required by law, but many mortgage lenders require proof of adequate coverage as a condition of the loan. Requirements can vary by lender and state. Are floods and earthquakes covered by standard homeowners insurance?Many standard homeowners policies exclude damage from floods and earthquakes. Separate policies or endorsements may be needed for these risks, depending on your location and insurer. How much buildings coverage do I need?The amount of coverage you need usually depends on the estimated cost to rebuild your home or building, not its market value. An insurance professional can help you estimate an appropriate coverage limit based on construction costs and property features.
Still have questions? Talk to a local insurance expert.
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