Do we need buildings insurance? (freehold/cash edition)(55 Posts)
I've just purchased a semi-detached house (freehold, not leasehold); and I've done it with cash (no mortgage or financing from 3rd parties). I'm not swimming in millions: prices in the North are low; but if I still have £50+k left for a rainy day, and I prefer to bear that risk myself vs selling it to the insurer, why should I get it?
i.e: Do I (legally) need buildings insurance? (the deed says so)
Why is Acme Insurers any better than the savings of my parents for example?
Could your savings rebuild in case of catastrophe e.g. Fire? If not apart from legalities it would be silly not to have it imo.
It would cost more than £50k to repair major damage and even more if, for example, a fire that started in your house spread to your neighbour's and you were held liable. Buildings insurance is a couple of hundred pounds a year, you don't have to have contents insurance if you don't wish to.
Your parents might have a few opinions about whether they would prefer you get insurance or use their savings!
If you don't want to pay for buildings insurance and there's no third party charge that says you have to do so and you are aware of the risks and not planning to make anyone else liable then you don't have to take insurance if you don't want to.
Mad not to! It is relatively inexpensive and if you have subsidence or major flooding, you will need deep pockets. Why risk it?
Buildings insurance is cheap, why would you carry the risk yourself? Sorry but you would be mad to not insure the buildings.
Irresponsible not to have buildings and contents if you're a homeowner, in my opinion. What if you lost everything in a fire? What if you had to move into temporary accommodation because your house needed major repairs following a fire or flood or other disaster?
Just tot up the cost of carpets, curtains, furniture, bedlinen, white goods, kitchen equipment, electronics, clothes, books, dvds etc etc and then decide if you need contents insurance.
Let me see. When we bought this house we got full buildings and contents, including a boiler/water cover.
Month 1: kitchen floor sprang a leak, water cover activated, kitchen floor dug up, leak fixed, floor reinstated. Cost £0, and no insurance effect as it was the cover not the insurance that dealt with it
Month 6: Boiler went, again the water cover was activated, comprehensive report and recommendations given. New boiler fitted, old pipework removed, immersion and header tanks also removed. Cost, just the boiler!
Month 30: Poo explosion, yet again the water cover was activated. Nice man came out, too a look, said "Shared drain, no can do" Then explained what that meant, that the water provider was responsible, he then made the call and got them to come out. Cost £0.
If you tot up what those obs would have cost if we'd had to pay for them it would have been £5K minimum. As it is the water cover has cost less than £500 for 3 years.
Imagine what something structural would have cost....
I understand your points of view; however, if it was a loser's game you wouldn't see the companies coming back to it again.
Ex-ante: (the %probability of loss * magnitude of loss) << £Premiums
The house was built circa 1940; some part of me would be happy to be able to start from scratch. If one is able to bear the risk herself, I still don't see why not. I know that the diversification is an advantage, but the costs are minimised if you take it on your shoulders.
(With the savings I'm expecting to make, by the time there is a fire I should have enough £ aside to pay to rebuild both my neighbour's and mine, yes;)
OK... have a look and see how much it costs to clear a site ready to start all over again... your £50Kish won't go very far at all.
If you think saving £300ish a year means you will be able to self insure then, erm... how long do you expect to live?
You'd be crazy not to. You can get buildings and contents insurance for about £12 a month (look on the comparison websites). I have always been mortgage free, cash buyer and I always insure. I don't even notice the money leaving my account and it's one less thing to worry about!
Yes! Yes! Yes!
Some policies don't just cover repair costs but also things like emergency accommodation and legal costs. Imagine if your house was flooded and needed major works and was uninhabitable for a year.
You never know what could happen.
'By the time there is a fire'
Sorry but how do you know when a catastrophe is going to happen? It could burn down the day you buy it?
Our Buildings insurance is under £200 a year. Up to you to take the risk, but also weigh up the factor that if, for example, subsidence occurs - affecting the attached neighbouring property you will be held liable. Or a fire, again affecting the other one too - insurance would cover this. 50k wouldn't.
Buildings insurance typically also includes public liability insurance so that if, for example, a tile flies off your roof and injurs your neighbour the insurance company will cover the costs if you're sued.
there was a flash flood near me. 17 houses affected. Some are still not sorted out 10 months later and that is with insurance companies being helpful, cooperative etc. Most people had to be reaccommodated.
Just not worth the risk. Has anyone mentioned subsidence yet and the cost of underpinning?
You would almost certainly save money by not having buildings insurance, but if the worst happened (house burns down, disappears into a sink hole, gas explosion etc) and has to be rebuilt you would obviously end up massively out of pocket. That's extremely unlikely to happen, so I guess the gamble is up to you.
£250 per year * 60 years = £15000
It would cost a lot more than £15000 if your house was damaged by fire or flooding. Even more if fire spread to your neighbours' properties.
All of the above reasons and there could be a situation, especially as you are in a semi, where you are liable for repairs to your neighbours property.
When we had a row of 40ft trees on our garden boundary, they were included in our insurance in case they fell onto a neighbour or their property.
"Buildings insurance is cheap, why would you carry the risk yourself? Sorry but you would be mad to not insure the buildings."
It is a monumentally stupid thing to not insure your house.
Apart from fire or flood damage you might incur subsidence damage.
According to various money experts the insurances that people should always take out (where applicable) are car insurance, contents insurance and buildings insurance, plus holiday insurance if going away.
Buildings insurance usually covers fixtures and fittings as well.
And if you have children, it's a good idea to have life insurance too.
I don't know why you've bothered posting as you seem to think you are cleverer than everyone else who has contributed. So go ahead, knock yourself out and don't bother insuring possibly the most expensive purchase you will ever make.
Just be sure, aside from having money to burn rebuilding from your own funds that you can also afford to house yourself and your neighbours if an issue in your house makes you and them temporarily homeless. And what if, when that happens, you don't have the money to put things right? It's okay for you taking your 'calculated' risk; what about anyone else affected. And what if you get sued over it?
Your attitude is the very definition of penny wise, pound foolish. And goady.
Such an irresponsible attitude. I hope you don't have kids.
Do you have a couple of good sad face pictures? you might need them for your begging "go fund me" page when you are homeless and penniless.
Owning a house, even if you are lucky enough to be mortgage free, is not a free ride! It costs! This means that you need to plan and save to cover the cost of regular maintainance to keep it in good order . And as it is the most expensive asset you will ever have it makes sense to protect it. The cost of home insurance , contents and buildings, is probably less than you would spend on having a cup of coffee from a coffee shop everyday. I know which I would rather spend my money on, but then I like to sleep at night and not worry about fire, flood, storms, subsidence, sinkholes, gas explosions etc etc.
Wow, I'm surprised how offended some posters are by this.
Some people choose not to have buildings insurance. Their choice. Yes it's a gamble (and not one I'd take personally) but the odds are massively in their favour and I can't see why other people should care.
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