Choosing Buildings Cover When You Get a Bond
Yes, you can choose your own cover and this is how
So, you’ve found the right property. It’s in the right area, it’s the right price, and now you’re going to start the process of applying for the bond so that you can claim your status as lord (or lady) of the manor. It’s at this point that you’d need to organise buildings insurance for your property. This type of cover is typically non-negotiable when it comes to applying for a bond from the bank, because it helps reduce their risk in giving you a loan.
Before we go on, let’s define buildings insurance. For the sake of clarity and all that… Buildings insurance covers any built structures including your home, garages or outbuildings from damage or loss. It’s actually a rather important aspect of owning property with a structure on it.
Without further ado, let’s explore what it means to get buildings insurance if you’re applying for a bond.
How much insurance you need
As we’ve said, most financial institutions (like banks) expect you to have the minimum cover for the estimated value of your property. This value is generally expected to be a sufficient figure that can be used to replace your property with one of the same value. That’s if the worst happens, of course.
While we can’t advise on what constitutes a minimum figure, what we can say for certain, is that you’ll never be allowed to insure your property for less than this minimum amount.
Where you get insurance from
Most banks will suggest buying your buildings insurance from them to keep everything in-house, so to speak. And while there may be merits to this suggestion, you are in no way obliged to do so.
You can instead choose to find exactly the kind of insurance you require and the price you can afford from any reputable insurer outside of the bank.
What you should look out for in a buildings insurance policy
The first thing to factor in is the long-term affordability of the policy. There’s no point in over-insuring your property and as a result in overpaying for cover. Obviously, you don’t (and can’t, as far as the banks are concerned) under-insure your property and land up in a worse position than before disaster struck… But there’s very little point in over-insuring and overpaying.
What you also want to make sure of is what your potential insurer’s claims pay-out ratio is and if they have a good reputation for paying out buildings insurance claims. You should also check what excesses apply, because these are amounts that you’ll have to pay if you claim… Even if the reason why you’re claiming isn’t your fault. Lastly, you should check the policy terms and conditions to be fully aware of what you’re paying for.
For instance, King Price’s buildings insurance covers all your permanent fixtures, including:
- Fittings and improvements.
- Swimming pools.
- Spa pumps.
- Loose gravel paths.
- Pool cleaning equipment.
These things are covered against natural disasters, like fire and floods, as well as internal issues, like leaking, bursting or overflowing heating systems, geysers and pressurised water pipes. Oh, and let’s not forget about incidents like damage from falling trees, power dips and surges, and even airplane crashes or items dropped from airplanes.
Take a second to get a quote
If you’re in the position of applying for a bond and want to get a jumpstart on sorting out your buildings insurance policy, or you find that you need to find an affordable policy in a hurry, then take a moment to get a commitment-free quote. You can get a super affordable quote here and see how little you’d pay to protect yourself from the financial risks of owning property when disaster strikes.
Go on! Taking 1 minute to check could end up saving you major moola.