What is buildings insurance?
Buildings insurance is designed to cover the rebuilding cost should your home suffer any damage to its structure. Damage could be caused by a variety of different factors, including fire, burst pipes, water damage and vandalism, whilst some policies may also cover accidental damage. As well as the structure, buildings insurance may cover permanent fixtures and fittings.
Having the right buildings insurance cover in place is of vital importance as it should cover the cost to rebuild the main elements of your property, including walls, floors, ceiling, roof, windows and doors. Garages and other outdoor buildings can also be included.
Each year, the Association of British Insurers produces guidelines on rebuilding costs. It is worth referring to these when taking out or renewing building insurance to help you assess the cover you need.
Do I need buildings insurance?
Yes. It is a condition of your mortgage that you have adequate buildings insurance for your property. Details of your policy must be provided, if requested.
Adequate buildings insurance must be in place at all times and meet the following minimum requirements:
- The policy should be arranged with an insurance company regulated by the Financial Conduct Authority
- The policy schedule must show the period of insurance
- The level of cover must be at least equivalent to the current reinstatement value and be index linked
- The buildings insurance is arranged on the property your mortgage is secured on
Before making any decisions regarding your insurance needs, we suggest that you seek independent advice from an FCA authorised insurance broker or intermediary. They will be able to recommend the level of insurance needed to protect your property fully.
What happens if I don’t have buildings insurance?
Having adequate buildings insurance is a condition of your mortgage, so not having a policy in place means you will be in breach of your contract and could therefore be putting your mortgage – and your home – at risk. It remains your responsibility to insure your property. We will remind you of this obligation, annually, when we issue your Mortgage Account Statement.
What is Lenders Interest Only (LIO) insurance? Am I covered?
LIO is a buildings insurance policy solely for the lender. LIO is arranged in the event of you failing to provide requested evidence of buildings insurance cover on the property. This policy only insures us and protects our financial interest in the property. It does not provide you with any cover for rebuilding costs. You should therefore not rely upon LIO insurance for insuring your property; you must always arrange your own buildings insurance.
Do I need contents insurance?
It is not a requirement of your mortgage conditions to insure the contents of your property. However, as a buildings-only insurance policy will not cover personal possessions, furniture or household goods that are not permanent fixtures, you may want to do so. If you have any questions or want to understand what cover is right for you, speak to an insurance broker or intermediary.
When do I need to provide my buildings insurance details to you?
When your mortgage first completed, you would have provided details of your own buildings insurance. We do not require you to provide evidence of insurance every year. However, under the terms and conditions of your mortgage we have the right to request evidence of buildings insurance at any time during the life of the mortgage. It’s important, therefore, that you ensure adequate buildings insurance cover remains in place throughout the life of your mortgage. In addition to breaching the terms and conditions of your mortgage, failure to maintain adequate buildings insurance will leave you financially unprotected in the event that your building is damaged or destroyed.
How do I provide you with my buildings insurance details?
If we ask you to provide evidence of buildings insurance, you should provide a photocopy of the insurance schedule by post, e-mail or fax (see contact details below). Please do not send your original insurance schedule to us – you should keep this in a safe place.
What are your contact details?
Kensington Mortgage Company Limited
Maidenhead Office Park,
Telephone: 0333 300 0921
Fax: 0333 300 0923