Any property you own is likely to represent a substantial investment. With so much of your money tied up in it, of course, it makes sense to safeguard both the structure and fabric of the building and of its contents against a myriad of risks and perils – some of which might leave your property a total loss and in need of a complete rebuild.
But, when arranging that property insurance, it is critical that you choose the cover most appropriate to the type of property concerned and its intended use.
Here are some of the types of property insurance from which you might choose:
Homeowners’ property insurance
- those who are buying their home with the help of a mortgage are obliged to meet the lender’s requirement to keep the building adequately insured at all times;
- home insurance is therefore the most common type of property insurance for such individuals;
- the total building sum insured typically equates to the estimated cost of rebuilding the property in the event of a total loss – and indices published by the Royal Institute of Chartered Surveyors (RICS) are frequently referenced in updates to the total building sum insured;
- both homeowners and the 36% of the population who rent their accommodation may also benefit from the purchase of contents insurance to safeguard their possessions and belongings;
- the ABI notes that contents insurance is the second most widely purchased form of property insurance for British households;
Property owners’ liability insurance
- any property owner bears a responsibility for the safety of others who may come into contact with the premises in question;
- if any visitor to the property, a neighbour or passing member of the public is injured or ha their property damaged, the owner of the building may be held liable and ordered to pay substantial compensation (especially if physical injuries are involved);
- property owners’ liability insurance, therefore, typically offers a minimum of £1 million of indemnity against such claims – although ceilings of £5 million or even more are not at all uncommon;
- not all property is owner-occupied, of course, but may be let to tenants or leaseholders;
- in those circumstances, specialist landlord insurance is not only the relevant type of property insurance but essential for covering the particular risks associated with a building occupied by tenants or leaseholders – unless specialist landlords’ is in place whilst the premises are let to tenants, any claim for loss or damage is likely to be dismissed;
- buildings and contents cover may be arranged under this type of property insurance, and the particular liabilities to which landlords may be exposed (towards tenants and their visitors) is also reflected in landlords’ liability insurance;
Commercial property insurance
- property insurance also distinguishes between residential and commercial property;
- clearly defined by the use to which the property is put, commercial property insurance is the essential safeguard for any non-residential property – whether occupied by its owners or let to tenants or leaseholders;
Mixed-use property insurance
- a further variant on the theme of property insurance extends cover to those premises which are in mixed use – a flat above a shop, for example, or a pub or hotel which has living quarters for its owners or staff on upper floors.
Whatever the nature of your property and whatever its use, there is a particular type of property insurance to provide the protection you need – make sure to choose the relevant type.