Every homeowner and business owner should have home contents and buildings insurance. This insurance is something that people hate buying, because the idea of a building falling apart seems so remote, but it is a must have, because if you do not have buildings insurance and something goes wrong, you could end up facing some serious financial penalties.

Many mortgage providers simply will not provide a loan for a property if you do not have building insurance. They want to know that if something does go wrong and the roof falls apart, there is subsidence, or a fire damages the property, their investment will be protected. That is what insurance will cover you for – if your home is damaged, you will be able to rebuild it.

This insurance goes alongside contents insurance. Contents insurance is what covers your possessions, while the buildings policy will cover everything else. If you get a mortgage then let your insurance lapse, you could be unwittingly putting yourself in serious financial danger.

Even if you do not live in an area where there is a lot of earthquakes or hurricanes, floods can strike almost anywhere, subsidence, burst pipes, fires, vandalism and freak accidents involving road traffic could be a threat to your property. It is your responsibility to make sure that you are ready to cope with anything that gets thrown at you.

Make sure that you are honest about how much your home is worth. While it is natural to not want to pay a higher premium than you absolutely need to, it would be unfortunate to end up with only partial cover if you under-value the property. Remember that you should be aiming to insure your property based on not just the market value, but the rebuild value – that is how much it would cost to completely rebuild the house if it was destroyed.

Rebuilding a property could seem daunting, but in most cases, the rebuild cost of a house is lower than the current market value. To get an accurate assessment of how much it might cost to rebuild your home, you should contact a chartered surveyor. In fact, get more than one to come out, to make sure you get an accurate assessment.

Compare several policies – find out exactly what is included. This is particularly important if you have several outbuildings, or a period property, for example. In addition, check about things like whether you will be covered for temporary accommodation if your home is destroyed and you need somewhere to live while you wait for the claim to come through. Think about things like legal cover, as well. If your home is destroyed and the resulting problems damage your neighbor’s property. Having the peace of mind that you are going to be protected if things do go wrong is very important. You home is the biggest investment that you can make, so make sure that it is covered to the full.