Building insurance

Building insurance covers the structure, fittings and fixtures of your property and avoids a financial crisis when you are still paying for your home. In fact, lenders are authorized by law to make the policy compulsory whenever you take out a mortgage. The property is the security that backs up the loan. If severely deteriorated its value will be affected.
Structural damages resulting from fire, vandalism, storm, flood, impact by vehicles and falling trees, among others, are often covered. The amount insured in your policy should be equal to the rebuilding costs of your home. Often this is not represented by the market value of your property. A building insurance claim should get you back at the same point where you started.
Premiums are determined by the location and rebuilding cost of your home. You should make sure that the amount insured is index linked. This means that it changes in line with rebuilding costs. Inform you provider of any structural improvements in order to keep your claim up to date. Your lender will require the property to be insured at all times. If you fail a payment of the policy, he might debit it from your mortgage.