Buildings insurance

Buildings insurance covers any damage to physical and non-removable aspects of your property. This protects you against natural disasters, such as flood, storm and lightning, and from man-made risks like fire, vandalism and riot.
If your property is located somewhere that is particularly prone to damage, such as on or near a floodplain, then it may be worth considering whether you want to insure your building for the whole cost of rebuilding it. This cost will be far lower than the market value of the property. To avoid paying unnecessarily high premiums, a chartered surveyor will be able to calculate the value and cost of rebuilding. 
Most lenders will arrange insurance themselves when the surveyor inspects the property. They will then attach the insurance to your mortgage and you will pay it alongside your monthly mortgage payments. However this does not mean that you will be getting the cheapest and most cost effective insurance policy. If you find one which is better than what your lender is offering, then find out if it is ‘index linked’.
Index linking means that each year your policy will include a recalculation of the cost of re-building your property, based upon the average increase in re-building costs in the UK that year. Index linking guarantees that your property doesn’t become ‘under insured’ in the future. If the insurance cover matches the policy offered by your lender, they will normally accept it and attach it to your mortgage payments.
Some mortgage lenders, however, will not be so flexible and will make it a condition that you stick with the insurance policy they arrange. If the mortgage is particularly favourable, then it may be worth paying slightly more on their insurance policy, because you might not obtain such a good policy elsewhere. However, if the added cost of this insurance outweighs the advantages of their mortgage, then you should consider using another mortgage lender which allows you to arrange your own insurance.