Building Insurance - First Mortgage

chrissy_stevo

Hi

After a bit of advice, my first home is due to be built in the next month and I must have building insurace in order to attain my mortgage. My question is, does the insurance need to be for the total amount I have borrowed, or just for the rebuild value of the house. I realise I could ask the mortgage provider this but I would rather some independant advice rather from someone trying to sell me isnurance.

Thanks in advance.

Quentin

Yes, rebuild cost.

Red_Cat

It's rebuild cost, as if the worst was to happen, the land the property is on would still exist.

InsideInsurance

Rebuild BUT rebuild needs to include the cost to demolish the existing property and not just the cost of actual building

kingstreet

When the surveyor inspected the property for the mortgage report and valuation he should have set a "minimum rebuild figure" for insurance purposes. This is the amount the lender will insist you have cover for.

Many people avoid this by taking flat-amount or unlimited buildings cover based on the number of bedrooms. Blanket figures of £500,000 or £1 million are common and the rates tend to be competitive.