Home building insurance, also known as homeowners insurance, is an insurance policy that protects your home and your home’s structure from all manner of risks, as well as the kinds of damage that those risks, when actualised, may cause.
It will not only provide you with the financial coverage for the cost of repairing or rebuilding your home if calamity strikes, it will also offer you the comfort of knowing that, should the worst happen, you’re prepared for it.
Like all insurances, every home building insurance policy will differ, from the excess to the particulars of what’s covered. So, if it varies by policy and provider, what can you rely on? Home building insurance typically includes:
This covers the physical structure of your home (the walls, roof, floors, and foundations) against risks like:
If that list reads more like the synopsis of an action film, remember that truth can be stranger than fiction. Being protected against the worst case scenario means that, for anything less, you can count yourself lucky!
Home building insurance may also include coverage for other structures on your property, like garages, fences, sheds, or decks. You could probably even bargain in a gazebo clause if you’re so inclined.
While standard policies might cover some natural disasters, like hurricanes or hail, not all do. A number of policies typically exclude coverage for certain natural disasters or ‘acts of God’ — but more on that later in the ‘what’s not covered’ section.
In the awful event that your home becomes uninhabitable, a good home insurance policy should pay for temporary accommodation for all the residents until your home is fit to move back into.
The key word you’ll pick up from talking to any insurer when making a claim is the word damage. That will be what you’re making a claim against in most cases — the damage caused by X, Y, or Z happening. As detailed earlier, damage resulting from the impact of events outside of your control is usually why people get insurance in the first place.
With this in mind, it’s worth paying attention to what home building insurance does NOT cover you for:
While worn carpets and old paint are obviously not going to be covered, maintenance issues like aging roofs or plumbing problems are your responsibility and need regular upkeep. If you’re negligent in these areas, you may void your claim to any damage caused.
For example, if you’ve failed to fix a problematic roof and then a major storm hits, the damage caused may not end up being covered if the roof was on the way out anyway — even if storm damage is under your policy. An independent assessment will usually be carried out to determine this before a ‘yay’ or ‘nay’ is given.
Let’s take another run at natural disasters. Typically, earthquakes, floods, and landslides, to name a but a few, require separate policies. Knowing when and where a natural disaster will hit is near impossible of course. But if the home you’re buying is in an area that’s prone to, say, flooding, then you’d be wise to make adjustments to your main home building policy to counter any obvious likelihoods.
This category should hopefully not be an issue if you had an inspection to determine if any pests, like termites or rodents, were present before you purchased the property. If none were there when you moved in, then you’ll want to keep it that way, as any damage caused by infestations will not be covered under home building insurance.
An excellent name for that action film we read the synopsis of before but hopefully not something you’ll ever have to face, as loss or damage caused by deliberate acts is not covered under home building insurance.
So now we know what’s covered, let’s find out who needs it.
Like all insurances, the cost of your tailored policy depends on a few factors.
As soon as you take legal responsibility for a property, you should lock in some home building insurance to protect your financial investment. It’s a critical safeguard against unforeseen disasters or damages happening to the largest investment you’re ever likely to make and will provide you with peace of mind.
