Grump of the day

[Me!]

I don't understand. Under what way are you penalised for being under-insured, other than the risk outlined above, of your payout turning out to be insufficient for your rebuild costs?

I believe that they won't pay out the total amount insured in some circumstances, just a %, so if you are 1/2 under then they give you 1/2 ? Not totally sure

Yes, that is exactly how it works.
So, my house is insured for up to £500,000 rebuilding costs. If it got completely destroyed and then actually cost £1,000,000 to rebuild, the insurance company would say that I was under insured by a half and so would only pay half of the £500,000 policy limit, meaning I only get £250,000 even though I've always been paying a premium to cover £500,000.

The above is just morally wrong as far as I can see, but at least it is clear and very unlikely to actually be a problem. That is because if my house was totally destroyed, with absolutely none of its original features left, then I could easily build a modern 5 bedroom oak framed house to replace it for £500,000 and even have money left over. But, if just half of the house was destroyed or damaged, then the local CO would rightly be involved in deciding how the repairs and replacement should be styled and built. Depending on what decisions are made, it could then work out to cost £500,000 to rebuild just half of the house. In that case, with half a house costing the full policy limit to rebuild, will the insurance company say that I was under insured by a half and reduce my payment? Well, the answer is probably yes they will. I have phoned them and spoken to the most senior person I could eventually get transferred to, and although it was wrapped up in loads of caveats and waffle, that does seem to be the approach that they would take in that situation :evil:

Flyfisher, thank you for the link, but the trouble with all the online rebuild calculators seems to be that they specifically exclude buildings that are listed or of non-standard construction. On this particular one though, I was surprised to also read the following statement containing the bit I've underlined which is wrong! "A second option is to use a rebuild calculator. Though simple and free to use, the drawback here is that you only get a rough idea of your home’s rebuild cost. This is important to bear in mind because if you underinsure and then, for whatever reason, your home requires a rebuild, you would only be paid up to the amount insured for, leaving you to cover any shortfall."

 

[88v8]

Christmas lights !!! I put them away tidy last year and today they came out of the box like a tangled plate of spagetti

We have about half a dozen sets of lights, two go on the tree, the rest I drape around the walls. There are three different varieties of bulb, in the shops I can find bulbs for only one set. Why do the makers keep changing them - is this something to do with 'The Green Crap' ??

Underinsurance - our specialist surveyor came up with a rebuild figure for our c16 thatched, less then the purchase cost. This did seem odd - I now realise he was referring to the cost of a modern pastiche. Urrrgh. I reckon I should double that. Oh well, never claimed in 40 years, fingers crossed.

Ivor

 

[Flyfisher]

Flyfisher, thank you for the link, but the trouble with all the online rebuild calculators seems to be that they specifically exclude buildings that are listed or of non-standard construction.

You're right, those calculators can be useful as a guide but period properties are not well catered for. Like 88v8, our specialist surveyor gave us a figure based on, he said, insurance industry accepted figures for m2 rebuilding costs of oak timber frame properties.

The other thing to be wary of is using market values as a guide. Our house is insured for about twice its market value whereas our previous house was insured for about 1/3rd. Ok, the previous house was standard 1950s brick construction but I suspect the main reason was the market difference between Hertfordshire and Norfolk.

 

[Me!]

I'm in even more of a grump now!
My existing £500k limit policy is with LV, but I just noticed that any new policy taken out with them now has a £million limit.
Excellent I thought and phoned them up for a quote. But no, ... after going through all my details, and remembering that they have insured the house already for many years, ... they informed me that they won't accept listed buildings on the new policy type

 

[livias]

My last house (Medieval timber frame) was insured with NFU Mutual. Everytime I did a comparison quote they came out cheapest but that was just a bonus because when I first insured it I had not a clue about rebuilding costs so they sent a surveyor out to cost it. In exchange I had to insure with them for five years.

They added on a bit more to the rebuilding cost every year according to some formula of their own and so I was confident that if the worse came to the worst they would not argue about paying out. NFU have a good reputation for being straight with the client anyhow.

I am not a saleswoman for NFU! Just a satisfied customer. It is a pity they don't insure houses that are 'under development' but I will insure with them again when we are finished

Anna

 

[worms]

The above is just morally wrong as far as I can see, but at least it is clear and very unlikely to actually be a problem. That is because if my house was totally destroyed, with absolutely none of its original features left, then I could easily build a modern 5 bedroom oak framed house to replace it for £500,000 and even have money left over...

Would they not insist on a like-for-like rebuild, though, or as near as possible? Perhaps in your case you are talking about period versus new 5 bedroom oak-framed house of similar size and market value, but I'm not sure they would pay out the £500,000 if you only built a modern £300,000 3-bed bungalow on the site...or a £2m block of flats!

 

[Flyfisher]

My last house (Medieval timber frame) was insured with NFU Mutual. Everytime I did a comparison quote they came out cheapest but that was just a bonus because when I first insured it I had not a clue about rebuilding costs so they sent a surveyor out to cost it. In exchange I had to insure with them for five years.

They added on a bit more to the rebuilding cost every year according to some formula of their own and so I was confident that if the worse came to the worst they would not argue about paying out. NFU have a good reputation for being straight with the client anyhow.

I am not a saleswoman for NFU! Just a satisfied customer. It is a pity they don't insure houses that are 'under development' but I will insure with them again when we are finished

Anna

I was also a contented NFU customer for many years until they suddenly increased our annual premium by about 50%. We hadn't claimed on the policy and our circumstances hadn't changed. The local office was very sympathetic but couldn't change the premium, so they lost the business to Lark.

But sending out their own valuer sounds like the ideal situation and I can't see how they could subsequently argue about being under-insured when they have set the figure in the first place. Hmm, perhaps I should give them another chance when our policy is due for renewal.

 

[Me!]

The above is just morally wrong as far as I can see, but at least it is clear and very unlikely to actually be a problem. That is because if my house was totally destroyed, with absolutely none of its original features left, then I could easily build a modern 5 bedroom oak framed house to replace it for £500,000 and even have money left over...

Would they not insist on a like-for-like rebuild, though, or as near as possible? Perhaps in your case you are talking about period versus new 5 bedroom oak-framed house of similar size and market value, but I'm not sure they would pay out the £500,000 if you only built a modern £300,000 3-bed bungalow on the site...or a £2m block of flats!

Sorry, I didn't mean that I personally would have the money that was left over with a new-build replacement. I meant to say that building a modern 5 bedroom oak framed house on the same footprint as my current one and with roughly the same layout of rooms would cost less than my £500k limit and that the insurance company would therefore pay the actual sum to build the new house.
I am assuming that if the existing house was completely destroyed, then the Grade 2 listing would be removed and I would be free to build a like for like replacement in terms of rooms and size etc., but without any attempt to try and replicate the features of the original. I could be wrong in this assumption and would welcome any views from the CO's of the forum, but as mine is a fairly standard Suffolk farmhouse of which there are hundreds more in this area, surely I wouldn't be asked to build a replica of the original using old-fashioned materials would I?

I will give NFU a call though, thank you for suggesting them.

 

[skier-hughes]

My last house (Medieval timber frame) was insured with NFU Mutual. Everytime I did a comparison quote they came out cheapest but that was just a bonus because when I first insured it I had not a clue about rebuilding costs so they sent a surveyor out to cost it. In exchange I had to insure with them for five years.

They added on a bit more to the rebuilding cost every year according to some formula of their own and so I was confident that if the worse came to the worst they would not argue about paying out. NFU have a good reputation for being straight with the client anyhow.

I am not a saleswoman for NFU! Just a satisfied customer. It is a pity they don't insure houses that are 'under development' but I will insure with them again when we are finished

Anna

I was also a contented NFU customer for many years until they suddenly increased our annual premium by about 50%. We hadn't claimed on the policy and our circumstances hadn't changed. The local office was very sympathetic but couldn't change the premium, so they lost the business to Lark.

But sending out their own valuer sounds like the ideal situation and I can't see how they could subsequently argue about being under-insured when they have set the figure in the first place. Hmm, perhaps I should give them another chance when our policy is due for renewal.

Strangely enough exactly the same happened to me and I went to lark as well! I gave them the chance the following year but no dice, they've not contacted me this year about trying to get my business back

 

[Penners]

I've got to go on a work "Christmas do" tomorrow. It's basically an all-day, start-at-lunchtime, piss-up. I don't want to go. I don't want to spend all day getting drunk, especially with my colleagues. But it's a bit late to drop out now, and I fear it would look like a snub, and cause more problems long term.
If anybody has any fast-acting 24-hour bug or virus, please would they email it over?

Extreme sympathy, Zebra! My idea of hell on earth is a works "do" where everyone just sets out to drink as much of the company's booze as possible.

I have found this bug to be particularly efficacious - it makes you look absolutely awful without actually making you ill (or do I just look awful anyway? Probably. ) Feel free to use it as much as you need to.

 

[Feltwell]

My idea of hell on earth is a works "do" where everyone just sets out to drink as much of the company's booze as possible.

You & me both. I've never found any pleasure in drinking to excess, although I admit to discovering that through practical experience in my younger days, like many others. That and having a memory that retains perfect clarity whatever the level of inebriation! People getting hammered just because the drink is free is not pleasant.

 

[DebnStu]

My grump of the day has been festering since the end of last week....we moved into our falling down house in Sept with the Listed Buildings peeps allowing us to put on a new 'like for like' roof immediately so got off to a good start.

Said lady came back last week to tell us that we were unable to do any further works without Listed Buildings consent condemning us to a winter without any facilities....oh how I do exaggerate we have a hole in the 'utility' floor with a toilet pan over it straight into the sewer and a bucket to flush. We had already joined the gym to use the shower facilities but were hoping to get a bathroom in as a minimum creature comfort. I can tell you we don't have a drink after 8pm as no way going out there in the freezing cold at night!

'She' was freezing just walking through the place. The listing is Grade 2 for the mullioned windows and passage arch. The place was allowed to fall into dis repair by a farmer and all of our plans are 'sympathetic' repair and updating but oh no!!!!!! The part of the upstairs that the bathroom is earmarked to go into is just a huge space as upstairs hasn't been used in dozens of years due to the roof leaking and rotting all of the floors, ceilings are down and you get the picture so not looking at changing outside appearance and even soil pipe to be run indoors.

I hope she sleeps well for the next 8 weeks in her warm and cosy home with nary a care for the poor sods in West Yorkshire who have nothing but an electric fan, a bed and 4 suitcases to keep them company in the midst of winter. Merry Christmas

Not sure if this classes as a grump or a rant!!

 

[Penners]

What I find so difficult to understand is the practice of actually setting out to get drunk. Then, the morning after, there's this ridiculously childish competition over whose hangover is the worst.

Arthur Dent: What are you doing?
Ford Prefect: Preparing for hyperspace. It's rather unpleasantly like being drunk.
Arthur Dent: What's so wrong about being drunk?
Ford Prefect: Ask a glass of water.

 

[LadyArowana]

What I find so difficult to understand is the practice of actually setting out to get drunk.

At least that shows a level of learning from experience though. People who set out to get drunk probably started off saying "oh I will just have a couple", but realised eventually that they always ended up drunk ( because the first few diminish the ability to resist more ), so decided it was better to know that at the start!

 

[a twig]

When you have had a terrible few days form work/life whatever, setting out to get drunk "to forget about life for a while" and achieving said status in a suitably convivial atmosphere often provides the break that one needs.

Typically it is the method by which one achieves the above goal that dictates the enjoyment however, for example:

A bottle of white spirit on a park bench is unlikely to provide the experience the majority are looking for.

However, several beers, along with a good raid of the more discerning parts of the top shelf, interspersed with the occasional bar snack, and accompanied by a roaring log fire and good company, can end up with the same end state of intoxication and cares temporarily forgotten, but also lot of fun had getting there. Unfortunately this method is considerably more usurious.

 

[CliffordPope]

The above is just morally wrong as far as I can see,

You are missing the point that even though you say you are covering your house to the extent of £500,000, you are actually expecting the insurers to cover the whole value but get away with only paying half-price.

Supposing your house suffered damage, costing £5000,000 to repair. Which bit of the house is that?
What an amazing coincidence that the portion you had covered just happened to be exactly the bit you had insured!

May be the insurers might argue that their bit was undamaged - it was yours that was damaged?

Anyway, if the actual rebuilding cost is so hard to estimate, it's silly getting cover for a specific sum. Buy insurance that covers "up to £2m" and then they would pay whatever it cost.

 

[Flyfisher]

The above is just morally wrong as far as I can see,

You are missing the point that even though you say you are covering your house to the extent of £500,000, you are actually expecting the insurers to cover the whole value but get away with only paying half-price.

Supposing your house suffered damage, costing £5000,000 to repair. Which bit of the house is that?
What an amazing coincidence that the portion you had covered just happened to be exactly the bit you had insured!

May be the insurers might argue that their bit was undamaged - it was yours that was damaged?

I've heard that argument before, but I find it hard to agree with. The job of the insurance company is surely to estimate the risk of something happening - subsidence, hurricanes, fires, explosion, that sort of thing. They then combine this risk with the maximum cost of repairs to determine the premium. If the home owner only insures their house for, say, £250k it does not affect the risk of a claim but it does, of course, halve the maximum cost of the claim, therefore it is only fair that the premium is reduced. It seems astonishingly unfair for the maximum claim to be HALVED to £125k because the insurance company can claim the house has been under-insured.

Why should the house value matter at all? After all, we can insure our lives for arbitrary amounts of payout depending on the premiums we can afford, so why not a house?

 

[Penners]

Why should the house value matter at all? After all, we can insure our lives for arbitrary amounts of payout depending on the premiums we can afford, so why not a house?

Sorry, FF, but that's comparing apples and wingnuts.

Your life is an absolute. You either have it or you don't. So you come to an agreement with the insurers that they will pay out £x if you lose it.

Your house has infinite levels of potential loss, from a single chimney pot to the whole structure. The insurance company has to look at the maximum risk - the loss of the whole building - and cover you accordingly. If you just suffer a partial loss, they win. If the whole structure is burned to a crisp, you win (assuming you haven't paid premiums that amount to the entire value of the house!).

Like all insurance, it's a betting game. And like all betting games, it's weighted in favour of the person accepting the bet. That's why they're in business.

 

[Flyfisher]

I take your point about life insurance being all or nothing, but my point is that the amount insured is the maximum payout and is agreed beforehand, from which the premium is determined.

I'm suggesting that house insurance should be the same. An agreed maximum payout from which the premium is calculated (albeit with a different risk profile).

As you rightly say, if a claim is for less than the maximum amount insured then the insurance company wins. Actually, even if it IS the maximum layout, the insurance company still wins because it calculated the premium for that .maximum risk. The risk of under-insurance lies entirely with the insured but the insurance company should not be able to compound the risk by refusing to payout the maximum insured on the pretext of 'under-insurance'.

Imagine if someone bought life assurance of £10k but the insurance company would only payout a lesser amount because the policy was less than average?

Basically, if they take premiums to insure for £500k then they should have to pay out up to that maximum.

I realise this is not the way most buildings insurance works, but I do think it's not fair.

As for CliffordPope's suggestion of just buying insurance 'up to £2m' well, yes, that would probably work - if it was affordable by the home owner.

 

[DJH]

Grump...having a birthday so close to Christmas...

Doug