Question about 'index linked' buildings policy

milliebear00001

My mortgage offer specifies that I must take out a policy with a reputable company, for the full value, full rebuild etc etc... all fine. Only think I'm not sure about is the bit about the policy needing to be 'index-linked'.

Does anybody know what this means and what I should check? I need to arrange an online policy due to time constraints.

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Index linking means if you base the buildings insurance on the rebuild value of the property that figure will be index linked over time thus, in theory, preventing under-insurance.

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milliebear00001

So, are all buildings insurance policies index-linked then?

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No. Some policies are blanket policies. They will either give you an unlimited amount of cover or an amount way in excess of your genuine rebuild cost. The same can apply to contents. It's probably best to speak to your mortgage provider to find out exactly what they mean.

jbrown104

Your bank/building society will accept a blanket buildings policy that over-insures the property. So for example if you took out a ****** **** policy for up to £1,000,000 buildings cover, and your house won't take £1m to rebuild, they'd be satisfied it's sufficient for your purposes.