Unlimited buildings insurance policies

So, what’s the issue?

Sounds great doesn’t it, “Unlimited buildings cover.” But read beyond the attention-grabbing caption and you’ll realise that this cover isn’t all it appears to be.

The “unlimited” headline refers to the total buildings sum insured. As we’ll discover, that’s not necessarily the most important factor to consider when buying your home insurance.

• The unlimited buildings figure will only come into play if there’s a total or near total catastrophic loss. You’ve no number for which you’re indemnified, no starting point for negotiation. It may be harder to prove what your total loss is as you’re effectively starting from zero, rather than say, £500,000.
• But total losses are thankfully rare. So, for most claims, that “unlimited” figure is meaningless.
• Insurance policies have “inner limits.” Whilst your total rebuilding figure may have no maximum, these inner limits, written into the policy wording, will reduce the amount an insurer will pay out for the following:

• • Finding a leak. Sometimes called “trace and access,” this is the amount an insurer will pay out to find the source of a water leak in your home, or on your land. If in the home it needs to be enough to cover the cost of your flooring and perhaps kitchen or bathroom units too. This almost certainly won’t be unlimited on a policy like this, and the inner limit could be as low as £5,000. Escape of water and the resulting disruption can be avoided by having a water leak detector. 
  • Alternative accommodation: This is vital cover and provides you and your family with somewhere to live if your home is uninhabitable. Some “unlimited” policies provide only 12 months of cover, which may not be enough if your home is listed or non-standard. Remember that rebuild costs have increased and repairs may take longer due to the higher demand and lower supply caused by Covid-19 and Brexit.
  • Theft or attempted theft: If this inner limit is restricted, then you may not receive enough in the event of a claim to repair any damage a burglar has made to your home.
  • Outbuildings cover: Unlimited buildings cover may only apply to your main property and not to your outbuildings, which may be limited and sometimes as low as £25,000. Ask yourself, would that be enough?
  • Pairs and sets cover. Check if you have this cover for your building. Remember that a bathroom suite may be classed as a “set”. If your basin is damaged, will your insurer pay for a matching replacement set?
  • Architects and surveyors’ fees. Are these covered under the unlimited heading or is this cover restricted? Again, if your home is listed or non-standard, you may face a shortfall in the event of a claim.

Unlimited policies aren’t restricted to buildings – unlimited contents insurance policies are also available. Again, just because your contents are unlimited this doesn’t mean that you’re properly covered as there are all kinds of inner limits which will apply.

There’s nothing fundamentally wrong with a policy that’s advertised as having unlimited cover. We often recommend policies like these, but don’t choose your home insurance on the basis of this cover alone. Speak to an insurance broker that understands the difference in quality behind home insurance policies and will guide you into choosing a policy that best suits your needs. It’s just one of the many benefits of using a broker.