Your home is likely to be the biggest investment you are going to make in your lifetime, and so it makes sense to insure it against fire, theft, and structural damage. But when it comes to insuring your home, the choice of insurance policies can be somewhat overwhelming. There’s home insurance, contents insurance, buildings insurance, the list goes on and on, but do you really need them all, and are they compulsory?
In this article, we’ll discuss the importance of Buildings Insurance, and why all Irish homeowners should invest in this type of plan.
What is the Difference Between Home Insurance and Buildings Insurance?
Essentially, home insurance is made up of buildings insurance or contents insurance, or a combination of both. Buildings Insurance covers the structure, fixtures and fittings of your home, while contents insurance covers your personal belongings inside such as furniture, electrical items, and clothing.
So, when considering ‘Home Insurance’, you simply have to decide if you need Buildings Insurance, Contents Insurance or both.
Is Buildings Insurance Compulsory in Ireland?
While Buildings Insurance in not compulsory in Ireland, if you plan on buying your home through an Irish mortgage lender, you will be required to take out a buildings insurance policy to protect your investment. Without it, you will not get a mortgage. Your mortgage lender may offer you a buildings insurance plan, but you are not obliged to accept it. You can shop around or ask your insurance broker to find you the best deal.
If you are buying a property with cash, there is no legal requirement for you to take out a buildings insurance policy, but it makes sense to protect your investment, particularly for things beyond your control such as flood damage, storm damage, and fire.
What Does Buildings Insurance Cover?
Buildings Insurance covers the structure of your property in the event of damage. This damage could be caused by fire, bad weather (storms, lightning, strong winds etc.), earthquakes, gas explosions, burst pipes, vandalism, flooding or any other reason listed in your insurance policy. It also covers permanent fixtures and fittings, such as:
- Wall & Ceilings
- Fitted Kitchens & Bathroom Suites
- Windows & Doors
- Built-In Wardrobes
- Electrical Cables, Plumbing Pipes & Drains
Outdoor areas such as sheds and garages may also be covered. In essence, your policy should provide enough cover for you to rebuild your home from the foundations up if it is damaged beyond repair, so discuss the fine print with your insurance broker to make sure you are fully covered.
New Builds & Buildings Insurance
If you buy a brand new property in Ireland from a builder registered with HomeBond, your home should be covered by a 10-year warranty. Depending on the level of cover included, this will cover major structural defects for up to 10 years, and other damage for up to 5 years.
However, HomeBond does not protect your home against the elements, and after one of the worst winters in over 300 years, it is recommended that you still take out additional buildings insurance to cover bad weather damage.
Landlords & Tenants: Who is Responsible for Buildings Insurance?
The owner of the property is responsible for insuring the building, and so you should ask your landlord if the house or apartment you are interested in is covered. Tenants do not need to take out a buildings insurance policy, but it is recommended that you take out a contents insurance policy to cover your personal belongings, particularly if you are furnishing the rental yourself.
Subsidence & Flood Risk Areas
If you are finding it difficult to secure an affordable buildings insurance policy in flood risk areas, or areas where subsidence is common, speak to your insurance broker. While full disclosure may push up the cost of your buildings insurance premiums, it could save you thousands of Euros in the long run, and you’ll sleep much better at night knowing that your home is fully insured against any type of damage.