The mortgage lender will usually insist that a building policy is taken out as a condition of the loan to protect the building against damage from fire and other perils, some lenders may insist the policy is taken out through themselves, but this is not always the case.
The sum insured should be for the full cost of rebuilding the property to an identical design if it is destroyed, this should also include the costs associated with clearing debris and architects and surveyor’s fees.
The most common risks are; fire, explosion, earthquake, storm, flood, water escape, accidental damage, subsidence, debris removal, public liability, theft and damage caused by attempted break in.
This insurance covers the contents of the property against loss or damage in line with the buildings policy and damage and theft to contents both within and away from the property in accordance with the policy conditions and options selected.
The Buildings and Contents Insurance policies are usually purchased as one block policy, which can assist in reducing the premium.