Finance glossary
Buildings Insurance
In simple terms
Buildings insurance covers the structure of your home — walls, roof, floors and permanent fixtures — against damage from things like fire, flood and subsidence.
On this page
What does buildings insurance mean?
Buildings insurance covers the permanent structure of your property — the walls, roof, floors, and fixtures such as fitted kitchens and bathrooms — against events like fire, storm, flood and subsidence.
It is based on the cost of rebuilding your home, not its market value.
How buildings insurance works
You insure for the rebuild cost and pay a premium. If the structure is damaged by a covered event, the insurer pays for repairs or rebuilding, subject to the excess and sum insured.
For flats and leasehold properties, buildings cover is often arranged by the freeholder and paid for through the service charge.
How could this affect me?
A mortgage lender will normally require you to have buildings insurance, because the property is its security. Setting the rebuild figure too low risks a shortfall after major damage.
Check whether you or your freeholder is responsible for arranging it, especially in a leasehold flat.
Things to watch out for
- Insure for rebuild cost, not market value.
- Leaseholders may pay for it via the service charge — check who arranges it.
- Subsidence and flood cover terms vary — read the detail.
Know your rights
- A mortgage lender can require you to hold buildings insurance as a condition of the loan.
- You can complain about an insurer and escalate to the Financial Ombudsman Service; the FSCS covers insurance if an insurer fails.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Buildings insurance (opens in a new tab). Accessed 22 Aug 2026.