If you own property, you will likely want to protect your investment with insurance.  Insurance is a form of protection for your investments that allows you to have the peace of mind that if something were to happen to your property; you would be able to replace or repair all of the damages.

How much should I insure my buildings for if I live on the property?

If you live on the property you are insuring, you will want to make sure your insurance coverage is on the higher side.  The reason is because you will need more money to repair damages on your dwelling in a smaller amount of time than an unoccupied building that can be worked on for an extensive period of time for less money.  If you own more than one property, always make sure they all have adequate coverage, but save the best coverage for the one you live in.

Building insurance is a protection of the owner’s investment in their home from things like natural disaster or calamitous events.  Unlike contents insurance, this is often done to comply with mortgage loan requirements.  In other words, when a loan is taken out on a property the institution making the loan might want to hedge their bet and have the buyer insure the building.  This would mean the loan would still be repaid, even if disaster struck.  You may need to ask the mortgage company, “How much should I insure my buildings for?” because they may have an amount required by law.

If the home that you live in were damaged by fire, the family would have to find another dwelling to stay in, until the home were inhabitable again.  This adds insurance cost.  Your deductible will also add cost.  If you have a very low deductible, then your company covers more in a total loss and you have to cover less out of pocket, but your premiums will be high.

I am a landlord, how much should I insure my buildings for?

If you do not live in the property but rent it out, it is important to get owner’s coverage on top of the coverage you already have.  Most mortgage companies in the UK will force you to have landlord coverage by law along with your standard building insurance.  You will need to make sure that your tenants are well taken care of in case their home becomes uninhabitable. 

This includes in the price of insurance a secondary dwelling, such as a motel, while repairs are being made.  Sometimes, in a worst-case scenario, a tenant is injured in your home due to your negligence.  If you forgot to fix a broken stairwell or had faulty lighting, and it injured your tenant, your insurance would have to cover medical bills, unemployment payments, and other costs associated with accidental injury.

If you are still asking yourself, “How much should I insure my buildings for?” my best answer to you is to hire either a lawyer or a professional insurance adjustor to help you add up all of your assets and costs.