Areas of Law / Insurance law

We own a terraced house worth about £90,000, but the building society insists that we insure it for the full cost of rebuilding it, which would be about £180,000. Can they do this? It doesn’t make economic sense.

It does make sense when you consider that the property is the building society’s security against you defaulting on the loan. If the house burned down they would have nothing to repossess if you decided not to repay the money you’d borrowed. I presume you’re entitled to shop around for the cheapest insurance. But anyone who’s had to make a claim on their buildings insurance will tell you it’s something you shouldn’t skimp on whether you have a mortgage or not.

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