The main difference between building insurance and household insurance is that household insurance usually covers the contents of a building against loss whereas building insurance covers the actual building. These policies cover damage to buildings that may be caused by floods, fires, earthquakes and damage caused by robberies, war, burst pipes and riots. It is very important to carefully read your building insurance policy before signing the contract to ensure that you will be able to cover any damage caused which may not be covered by the proposed building insurance policy. Building insurance is usually divided into two categories, namely residential and commercial building insurance. Residential insurance will only cover residential properties in residentially zoned areas whereas commercial building insurance will only cover building used in industry, located in business and commercial zones. These two different building insurance policies will often have distinctly different exclusions. Sometimes you may also need to add outbuildings, such as garages and sheds, to your building insurance policy as they are not necessarily covered.