The cost of your building insurance premium all depends on the risk category your insurer places your house into.
For example, your house will be put into a high risk category if it is likely to have subsidence. This is the most important aspect insurers look at, due to the costs involved to repair. Other factors that they look at is the chance of flooding and storm damage and the types of claims that have been made in the area.
There are two types of policies for buildings insurance: Sum insured policy and a bedroom rated policy. A sum insured policy depends on the rebuild cost of your home (not the market value). A bedroom rated policy does not require you to calculate this and cost is determined by the amount of bedrooms your home has. If you can, get quotes for each type of policy to see which is cheaper for you.
There is usually a standard excess on policies (what you would pay if you made a claim). However, if you agreed to a larger excess, your premium would be reduced by between 15 to 50 percent.
Some companies have a no claims discount, where if you do not claim, your premium will fall. Try and buy your insurance annually as if you pay monthly this could cost more.
Flat insurance - It is definitely worth shopping around if you live in a flat. Even though they tend to be smaller than houses your insurance will be more.
Leaseholders - The sorting out of buildings insurance for flats in England, Wales and Northern Ireland is normally done by the freeholder. Sometimes this is done by a management company appointed by the freeholder or if the flat owners collectively own the freehold the may chose to do it themselves.
So if you do own a flat, the buildings insurance is usually incorporated in the service charge, charged by the freeholder. You can always ask to see the policy if this is the case.
The Housing Act 1996 gives you the right to challenge it via a Leasehold Valuation Tribunal, if you are not happy with your freeholder's choice of policy. The Leasehold Advisory Service can provide details and advice.
Check out the guidance on buying buildings insurance, if it is up to you to find cover. Premiums are based on the property's rebuilding cost, a house does not necessarily cost more to insure if it has been converted into flats.
As with house insurance, policies for flats can be bedroom-rated or sum-insured (where cover is based on the cost of your belongings).
That said, insurers do prefer to provide buildings cover for flats in one policy, as it is easier to identify who is responsible for common parts like halls, stairways and the roof.
In Scotland it is different as your title deeds determine whether you arrange the insurance yourself or collectively with other flat owners.
Tenants - If you rent your flat, the only insurance you are likely to be liable for is contents insurance. Your landlord (the leaseholder of the flat) is responsible for making sure the flat has buildings insurance, and usually pays for it.
Michael Challiner is the chief editor for Brokers Online. Brokers Online is one of the largest finance sites in the UK specialising in providing
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