Do we need buildings insurance? (freehold/cash edition)

[JamaicanFlowers]

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?

thanks :)

Say your house literally goes up in a puff of smoke tomorrow (let's imagine a gas explosion for example). The houses near us that were destroyed in an explosion a year ago are still neither completely demolished nor rebuilt. How much of your £50,000 would you have gone through by now on rent and replacing items (not even the high value stuff, we're talking clothes, pots/pans, basic furniture etc).

I'm guessing you'd be down to around £40,000 and that's without having to factor in anything like unpaid leave to sort stuff out, paying for all the surveys, assessments etc needed to clear the site. As others have pointed out just getting the site cleared won't be cheap so being generous you're a year down the line, your savings aren't increasing and you've got maybe £30k to rebuild a house...and that's got to cover everything - architects, engineers, materials, trades etc.

If you were to live in a detached property then entirely that would be your choice. However, by choosing to live in a semi you have accepted a responsibility towards your neighbours and I find even the thought that you would not insure your property when it is attached to someone elses feckless and irresponsible.

gas leak - explosion demolishes next door too.
fire - ditto

so you have more than one house to rebuild.

£50k won't cover that.

all avoidable for about £150 a year and an hour or so of time shopping around. And as others mention, those that don't have insurance when catastrophe strikes and then blub for help on gofundme don't always get bailed out.

If it's a semi, you should take out HI.

Imagine if the whole house burnt down to the ground, and the neighbours caught fire too. Do you think you could rebuild your property and theirs?

And before anyone says they should claim on their insurance, no they shouldn't, especially if they have legal cover, I'd be suing your arse.

Why are you being so tight?

Not offended Suki just bemused at the smugness protrayed, especially at the thought that £50K will rebuild 1 house, let alone a pair of semis!

Buildings insurance also gives you public liability insurance. If a tile falls off your roof and injures/kills someone for example, can you afford the possible multi million claim against you?
So many reasons to have Buildings insurance!

I assume you also don't bother with travel insurance or car insurance either then as insuring things is clearly a mugs game

You do not need it.

In the same way you do not need a parachute to jump out of an airplane. If you want to jump out of a plane a second time then you do.

Insurance is vastly overrated on most things. Vehicle insurance, life insurance is either a legal requirement or just bloody sensible. Home insurance is sensible unless you absolutely can ride out a catastrophic loss. The insurance market is huge and originated for a reason - pooled risk. Insurance companies have evolved to provide that service so of course they will and must make a margin. Where it is oversold, eg kitchen appliances - just don't buy the bloody brand again if it breaks! Unless you have in excess of 100 or so rental properties in different locations and can ride out the catastrophe, in my view you would not be particularly smart if you do not insure.

I will give you three examples why you should have buildings insurance cover.
1: My sister noticed a crack in one of her walls that wasn't there the day before. It got wider over a few days so she rang a builder who advised her to get in touch with her insurance company as he was sure it was caused by subsidence. The insurers sent a buildings inspector out who confirmed that it was subsidence caused by tree roots cracking the drains. The council owned the trees, the insurers solicitors got the council to take responsibility for the damage.
2: My friends had a catastrophic water leak from their water tank in the loft, they were on holiday when it happened, their nieghbour saw water pouring out of the front door, they contacted the son, when he opened the door he was met by a deluge of water cascading down the stairs, ceilings had given way.
The house took six months to dry out before any repairs were done, my friends had to stay in a hotel for a month before finding a rented house for the duration of the house being made habitable again.
Insurance paid for everything.
3: A leasehold two story house converted into flats, the owner of the upstairs flat had a water leak she was unaware of under the bath, the water collected in the ceiling space of the downstairs flat, the ceiling collapsed causing damage to the downstairs flat, the owner claimed on the insurance of the flat upstairs, insurance paid for repairs to both flats.

Our mortgage had a basic insurance policy as an obligatory part of the loan, basically to cover THEIR financial stake in our property. I never, in 25 years, made a claim on it and it wasn't really on my radar.

But when the mortgage stopped I went straight out and bought a policy which includes damage to others, contents and theft plus other things I hope never to claim on like private hospitalisation and hotel stays. For about £120 a year.
I now realise how bloody LUCKY we were for none of those things to have happened to us.
So for peace of mind OP, I'd strongly recommend it.

So, at £120 a year it would take the OP over 416 years to save £50,000.

One only has to look at a reputable news site, such as the BBC, to see almost daily reports of damage to homes and property caused by fire, floods, storms, gas explosions, vehicles crashing into them, crime. You can think 'it won't happen to me', but it happens to someone, somewhere, every day. Tomorrow it could be you.

A good insurer won't just pay up, but will deal with a lot of the hassle such as liaising with other insurers and official bodies, getting quotes and so on.

What about the damage your fire caused to others? Even if you sold the land and bought another cheap property you would still need to cover damage to others.

The OP thinks she knows better. I agree with wowfudge - penny wise, pound foolish.

I have to side with Sukitakeitoff.

I mentioned £50k as I could have brought up any other figure: just wanted to suggest that I could deal with those kinds of situations. That I prefer to take the chance.

You've brought up interesting sources of risk, and I thank you for that. There aren't high trees, just big bushes. It's a bungalow and my neighbor is unlikely to be harmed from a tile falling over him. It's on the high side of a v. sloppy street, so v. unlikely to suffer from floods. There could be a gas explosion, yes. And further subsidence is guaranteed, yes; unlikely that it has detrimental effects on the structure.

I understand the risks and the finances; my query was more related to the legalities, the legal affairs of not following what is suggested / required? in the title deed.

I don't know whether you all are getting extremely good deals on your insurances, but if a company offers me to insure my phone, (a financial risk I can bear myself), I normally reject the offer.

Driving an uninsured car is against the law. Not insuring your phone makes financial sense. I wanted to know on what side does buildings insurance falls.

I forgot this one !
My cousin rented a property out, it caught fire three weeks before Christmas caused by an electrical fault under the floor boards on the landing upstairs. Thankfully, the family renting it were away for the night, if they'd been at home they'd have been trapped as the landing and staircase burned away. The house was gutted, all Christmas presents were hidden upstairs, they were destroyed as were most of the rest of the families belongings.

I mentioned £50k as I could have brought up any other figure: just wanted to suggest that I could deal with those kinds of situations. That I prefer to take the chance. Does that have any meaning?

As many posters have tried to explain £50Kish won't be much use in a real emergency. I have a similar amount and am only too aware that whilst it is a lot of money to have in savings, it is not a long term, life changing amount, nor is it enough to protect us against any accident, injury, job loss or house crisis!

If you want to add a few more 00000s then don't be so coy! Unless you are trying to be modest you haven't got any means to deal with any situation!

but if a company offers me to insure my phone, (a financial risk I can bear myself), I normally reject the offer

So what you then need to do is take heed of what others are saying, find out the costs of underpinning for subsidance, clearing the land and rebuilding both properties in the event of something happening and weigh that up against how much you have in the bank. Then decide if saving 15k ish over the next 60 years makes financial sense to you, to most here being insured makes more financial sense than not.

Op I don't take out insurance on any appliances or phones, it doesn't make financial sense to do so, if my washer conks out I buy a new one.
I do have buildings and contents cover on my house though.

My FIL thought insurance was a waste of money. No holiday insurance, or house insurance. Then one holiday
MIL took ill in Spain, she'd had a minor stroke...he took a huge risk in bringing her home on his own, he didn't want her admitted to hospital over there as he'd have had to pay her medical bills. Whole other thread.

I'm not a property lawyer but title deeds are a legal document therefore if they say you have to do something I'm guessing you have to don't you?

I'm confused by you saying the £50k was to illustrate you could deal with the situation. Most posts on here suggest £50k won't deal with it. If you genuinely do believe you could deal with the situation surely you'd know that wasn't enough and would have used the actual realistic figure.

If you'd come on and said you had 500k then you'd probably get different responses.

Plenty of us on here understand risk, work with it daily, know that people have different tolerances for it and capacity to absorb it. We take the insurances that we need to mitigate each individual risk. I can absorb losing my job, buying a new phone but I can't rebuild my house or pay US level medical bills so insure against those ones.

You need to spend some of your money on a lawyer if your question is about the deeds.

if a company offers me to insure my phone, (a financial risk I can bear myself), I normally reject the offer Which doesn't make you a genius, many people make similar decisions based on how easily they can afford to repair or replace.

Again, you seem to lack awareness of the amounts needed for any big housing issue!

I wrote my answer not realizing there was a second page. Completely agree with SleepingTiger as well; and agree with the proposition that insurance makes sense for most people. I don't want to encourage/promote/defend recklessness, just to disassociate the legal from the financial (bayesian) decision.

What does OP stand for?
(I'm still new to mumsnet)

Original Poster - you
Original Post - the post you wrote in the first place.

OK. So Sleeping's post was the one that resonated with you!

The Bayesian inference is, quite clearly, that building insurance is a good thing. A single incidence can be catastrophic.

Legally then you need a solicitor to read your deed and advise you as to whether any clause about having building insurance has any legal teeth - could do, it wouldn't be unusual for a semi to have such a clause.

Either way, having buildings insurance is a sensible choice. Assuming your £50Kish will cover you in the eventuality of a claim is not!

Not insuring gadgets or household appliances makes sense. The worst that can happen is a couple of hundred quid and nobody will die or get hurt.

Not insuring a building or a potentially lethal car does not.

Oh yes, travel insurance also makes sense . ask the two cases last year who would be dead without go fund me.