House Insurance?

[Adam F]

Any reccomendations?

Were with NFU, but following a recent small claim (£400) (our 1st ever!) our premium has increased a silly amount, and the took 8 weeks to pay out - rediculous... so who do you use?

 

[Cloudscape]

This topic comes up fairly often. While you're waiting for replies, here's a link to the most recent discussions:

http://www.periodproperty.co.uk/forum/search.php?keywords=insurance&terms=all&author=&sc=1&sf=titleonly&sr=topics&sk=t&sd=d&st=0&ch=300&t=0&submit=Search

 

[Pford75]

NFU have a reputation as one of the better insurers when it comes to handling claims. The amount of the claim in relation to your total sum insured will have an impact on your premium whoever you are with. The type of claim will also have a significant impact if the insurer regards it as a recurrent cause (eg. flood).

It would help if you could provide some guidelines on your total sum insured, any specific details about the property such as thatching or under renovation etc. and a rough description of the recent claim.

 

[Penners]

It all depends on your house. Is it of "standard construction"? That is, brick walls, tiled roof, etc?

If so, then you may as well try some of the ordinary online insurers, like Aviva, More Than, Direct Line... et al.

If it's a period property that doesn't fit the "standard" description, then you might have trouble finding a "standard" insurer, and you may be better off staying with someone like NFU.

 

[Adam F]

Thanks for the replies - sorry should have been more specific. I'll have a look through the archived posts to.

House is a stone georgian farmhouse with slate roof. Last claim was for a dvd system hit by lightning. They paid out after several weeks - just seemed a long time?

 

[Pford75]

A few weeks is pretty much the norm on household claims. Sad but true. Especially when the cause is something a little unusual such as in your case.

It took 15 months to reach final settlement on my claim and there are flooded households who waited more than 18 months!

Not suggesting it's acceptable, just that in your case the wait is not too bad. As for the premium, by all means shop around, but any new insurer will want details of recent claims and will adjust their premium accordingly

 

[Penners]

House is a stone georgian farmhouse with slate roof.

That sounds moderately "normal" for the online insurers. When we lived in Oxfordshire I found a few of them who hummed and haa'd a bit at stone (despite the fact that it's arguably more durable than brick!) but a fair few of them will accept "masonry" as falling within their list of acceptable constructions. Slate, of course, is usually fine.

I should try one of the comparison websites as a starting point. Just be sure to read their assumptions about you and your house, so you know whether you're comparing like with like.

 

[Stephen]

A couple of points about 'standard' insurers.

If you have a major loss will they be willing to reinstate using traditional materials?
This is sometimes a problem in that if you are not absolutely clear at the outset that you want reinstatement cover for traditional materials they may insist that all they have to pay for is reinstatement with any 'equivalent' (but cheaper) modern material.

Thinking of minor claims - what happens if a piece of original glass is smashed by someone breaking in?
Most insurers will simply replace it with a piece of modern glass and that is the end of it. Whilst this may be OK as a temporary measure will they pay for traditional glazing (the modern equivalent that is) to go back in - which is more expensive and takes some time to source so the job may have to be done twice (first temporarily then again permanently).

What happens if there is a fire and it reveals something not previously known (e.g. a wall painting) and there is an issue over what to do about this revealed historic gem (EH, the CO and others may all have some input on what to do)?
How will the insurer handle such matters including the possible cost of additional work to previously hidden historic fabric and the additional cost of delays because of such discoveries?
NOTE Such a scenario has happened in a couple of instances!

The advantage (usually) of using an insurer experienced with historic buildings is that they would have probably have some experience of such matters and not be as 'fazed' as the high street insurers.

 

[Penners]

Stephen - an interesting point.

But doesn't an insurer undertake to repair and/or replace "like for like"? Many of them will charge you for "betterment" if that should take place, so they surely couldn't contractually be allowed to get away with "worsement", could they?

 

[Stephen]

Penners

Not an easy one I'm afraid. Depends on specific policy wording, circumstances, level of cover (especially if underinsured), etc, etc. Remember some policies operate on a 'new for old' basis. What do we mean like for like or new for old? What is appropriate in the context of an historic building?

The most important thing is to make sure they know they are dealing with an historic building (especially if it is listed) and that they acknowledge that this may mean that reinstatement couldmean use of traditional materials and a non standard approach, additional specialist professionals and/or craftsmen, etc, etc.

In reality the problems that arise when a claimis made will often (but not always) be with the loss adjuster, because generally the insurers do what the loss adjuster advises. Sometimes two similar claims with the same insurer will have very different outcomes depending on the loss adjuster.

Insurers will sometimes try to find any angle to wriggle out of a claim.

A client of mine has an insurance policy with a certain well know treatment company and in the course of frame repairs live Death Watch has been found (for which the insurance was thought to cover). Lo and behold this company (who should not be named) refused the claim because they found no evidence of activity - that is despite the fact that the DWB had a chorus line-up doing a very fine version of that pop classic 'Knock on Wood' at the time!!

 

[Penners]

Insurers will sometimes try to find any angle to wriggle out of a claim.

Well! That comes as a considerable shock to me, Stephen. My faith in human nature has taken quite a knock.

:wink:

 

[Anita]

The insurers that we had when we first purchased georgian listed farmhouse (brick/slate) told us part way throughthe first year that they changed their policy to repair/reinstate with modern materials and methods. So this seems to be a farily common trend. This was obviously not acceptable to us, nor would it have been to the CO.

When we first puchased the property we had a real struggle obtaining insurance cover due to the age and listed building status (even before the structural fault was known about). However we then swapped to "Eccelsiastical Historic Houses Policy" via a small broker in Taunton called Bruford Vallance. Not had any need to use them for a claim (fingers crossed as I type) but they are extremely helpful and the policy certainly appears to meet our requirements with regards to repairs.

 

[Flyfisher]

A fairly new near-neighbour popped in this afternoon to discuss his insurance cover regarding flooding, as part of our border is a river and he wanted to know if it has ever flooded. Fortunately, I was able to show him that any flooding would be on the other side of the river into the water-meadows and that our side was significantly higher. So, in practice, no significant risk. All well and good.

However, he explained that although his policy wording does cover him against 'flooding' the list of exclusions states that he is not covered for 'rising groundwater' and wondered what this actually meant. I wasn't really sure but can imagine it being a 'lurking' get-out-of-paying condition. Imagine severe weather resulting in massive rainfall runoff into a river causing the local water table to rise to the point of flooding a property; would this be classified as 'flooding' (=payout) or 'rising groundwater' (=no payout)?

Why do insurance companies do such things? If a property becomes damaged by water sloshing around its ground floor, does the underlying cause actually matter?

 

[Pford75]

However, he explained that although his policy wording does cover him against 'flooding' the list of exclusions states that he is not covered for 'rising groundwater' and wondered what this actually meant. I wasn't really sure but can imagine it being a 'lurking' get-out-of-paying condition. Imagine severe weather resulting in massive rainfall runoff into a river causing the local water table to rise to the point of flooding a property; would this be classified as 'flooding' (=payout) or 'rising groundwater' (=no payout)?

FF - It's worth understanding the background to 'flood' claims (believe me, I am becoming an expert via my own claim). Insurers used to (and many still do) consider a flood to be a single event (think flash flood) rather than gradually rising water or soaking over a period of time (as occurred with my wall). However, the Financial Ombudsman is clear on this matter.

Meanwhile a decision by the Court of Appeal has caused us to reconsider precisely what constitutes a ‘flood’. In Rohan Investments Ltd v Cunningham, the court held that a flood could originate from an accumulation of water that was not large, in absolute terms. Whether a particular accumulation of water amounted to a ‘flood’ would depend, at least in part, on the size of the property affected.

One of the judges – Lord Justice Auld – went further and indicated that a flood could arise from the slow and steady build-up of water and that it was not even necessary for the ingress of water to arise from a natural phenomenon. In his opinion, ‘flooding may or may not result from such weather extremes [as storms and tempests]’. He went on to say that ‘it is the water that enters and damages the property that is important, not the area or depth of flooding outside that counts’.

They published the following case study in their Ombudsman newsletter back in October 2001

case study – household disasters – floods

10/01
household buildings – flood – rise in water table – whether ‘flood’.

During heavy rainfall in November 2000, Mr B’s cellar filled with around four inches of water. He claimed under his household buildings insurance, which included cover for accidental damage. The insurer concluded that the damage was due to a rise in the water table and informed Mr B that this was not covered by the policy.

Mr B argued that the damage was clearly due to a ‘flood’ and that therefore it was covered under his policy. complaint upheld Although in the past we had held that such claims were not covered, the 1998 decision by the Court of Appeal referred to above (Rohan Investments Ltd v Cunningham) indicated that they might be valid.

We considered that, as a result of this decision, the complaint should succeed. This was partly because the wider interpretation of ‘flood’ was closer to the ordinary expectations of householders. The decision in this court case was contrary to a previous Court of Appeal ruling (Young v Sun Alliance) in 1977, but we considered Mr B was entitled to the benefit of the more favourable case.

Don't however assume that this makes everything clear - My own insurers are still disputing my claim on the basis that the flooding occurred over a period of weeks rather than hours. I will update my 'wall thread' with the latest news

 

[Penners]

Why do insurance companies do such things?

I presume that's a rhetorical question (like this one)?

A. Cynic

 

[Flyfisher]

Indeed, and borne out of exasperation. There can't be many 'service industries' that require the customer to have a knowledge of case law, as Pford75 has clearly gained during his wall woes.

I can (sort of) understand the different nuances to the word "flood" but I'm sure that householders don't really care; they want their property insured against water damage of any kind. Would it really be too hard to write a policy in such terms? (another rhetorical question).

I remember reading, many years ago, about a claim for wall damage by bees. The insurance policy covered "damage by animals" but the insurance company disputed the claim on the basis that bees are insects and not animals. Unfortunately I can't recall the outcome. Perhaps their lawyers should have used "mammals" instead of "animals". :roll:

 

[Penners]

Of course it wouldn't be hard to write an insurance policy that made crystal clear exactly what risks were covered. I'm sure that you - or even I - could do it without breaking too much sweat.

But a complete lack of obfuscation makes it much more likely that claims will have to be paid in full. And that wouldn't please our shareholders, would it?