A study by Nationwide building society has revealed that as many as one in five homeowners have left themselves exposed by not investing in building insurance for their property, an oversight that would mean that they would have no cover in the event of flooding or a house fire.

Although, unlike car insurance, insuring your home is not a legal obligation the fact that so many people are willing to take a chance and not bother is cause for some alarm, as Nationwide’s insurance director Robin Bailey points out:  "It is surprising that so many people are prepared to take such a gamble on their homes and personal belongings when you consider how much time and money we all invest in our homes. You never know what is around the corner and for that reason it is vital that people are prepared by having adequate insurance.”

Of course if you was being cynical you might think that Nationwide’s Insurance Director would say that , the fact remains though that however remote a possibility it may seem, by taking the risk of not getting building cover you’re leaving yourself open to a potentially devastating loss.  

If you don’t want to take this chance there is the option, as outlined on Moneysavingexpert.com, of self-insuring. This involves paying whatever monthly amount you might have paid to an insurer into a high interest savings account instead. If you need to claim you simply withdraw the savings.  The problem with this approach is that if something happens and you need to claim early on then chances are you won’t have saved enough money.

If you’re getting a mortgage you may find that buildings insurance is a requirement, which often means that mortgage holders end up purchasing home insurance at a less than competitive price from whoever’s providing their mortgage. This doesn’t have to be the case, remember that you’ll probably find a better deal by looking elsewhere.

Keep in mind also that many people actually pay far too much on buildings insurance because they mistakenly cover their property’s market value when in fact the sum insured should actually be the rebuild cost. This means that what you should be thinking of is the how much the raw materials and labor of a rebuild would set you back; any extra value your property may have due to its location should therefore be discounted.

Finally, you may be able to cut home insurance costs by combining building and contents insurance but don’t assume this is going to be the case, it’s probably getting a few standalone quotes too. Indeed, comparing the market is always a good idea if you’ve got the time. If time is a problem you could look into panel insurers like Asda Home Insurance who find the best quote for you from a panel of insurers.