Listed Building Insurance

[pete2616]

Hi all
I'm new to the forum and in need of some advise
I have a Grade 2 listed building in a conservation area. I bought it 5 years ago. There is a slight bulge in an outside wall and some of the door frames are at angles. I had a survey done on it and they said it is structurely fine. I have always had normal listed household insurance on this house but I am concerned if I am covered by this. I have always ticked the box saying no previous movement as I always thought these features normal for a period property. Do I need to inform the insurer of this? Will they insure me?

 

[Jon Maine]

Most insurance forms I have filled out ask if the building has suffered subsidence or flooding. We are on solid rock here and there are some signs of movement caused by historic structural deficiencies not subsidence, all resolved now so I rely on an engineers report which says I have no problems. However I am sure my movement was not subsidence so can put my hand on my heart and say I have filled in the form honestly. I guess it depends why your building moved in the first place as I think the standard question is subsidence ( foundation movement) not if it has moved elsewhere.

A good check for subsidence is the ground floor window cills. If the building has subsided the pillars each side of the window will sink more than the window cill itself which by comparison weighs almost nothing. The window cill will hump upwards in the middle and may have cracking in it or below.

 

[MdB]

I'm not an insurance expert but believe the following to be true:
With all insurance, it is very important that you let the insurance company know everything up front so that they can use the excuse not to pay that you didn't tell them something important. Also note that they only check what you have told them when you come to make a claim. For example, if a wall fell down at the opposite end of the house to the one with the bulge, they could refuse to pay on the grounds that you didn't tell them about the bulge even though it had nothing to do with your current claim.

On a separate note, it is also worth checking that your rebuild costs are sensible. I believe it is common for listed buildings to have rebuild costs which are considerably more than the value of the property (unlike a new build which is the opposite).

 

[Penners]

Like MdB, I'm no kind of expert. But if you can produce a report from a qualified surveyor stating that the bulge is no structural threat to the building, I think the insurance company will accept it.

But to be 100% certain, you might be best to show them the report.

 

[Moo]

On a separate note, it is also worth checking that your rebuild costs are sensible. I believe it is common for listed buildings to have rebuild costs which are considerably more than the value of the property (unlike a new build which is the opposite).

Where should one go to get a realistic estimate of the rebuilding cost?

 

[Flyfisher]

Like MdB, I'm no kind of expert. But if you can produce a report from a qualified surveyor stating that the bulge is no structural threat to the building, I think the insurance company will accept it.

I agree. In fact, having some form of expert opinion might be the only defence in the event of a claim, being proof that you had done everything reasonably possible to provide accurate information to the insurance company.

It has always seemed wrong, to me, that insurance companies put the onus on the insurer to answer questions for which they are often not qualified to answer - indeed, cannot reasonably be expected to be. To subsequently accept unqualified answers on such technical matters, which potentially invalidate the insurance, seems tantamount to sharp practice when the insurance company then take your premiums 'knowing' they have a 'get-out-of-paying' card up their sleeve in the event of a claim.

OK, that might be a bit harsh and I fully accept that insurers must assess their risk as far as possible, but asking questions of unqualified people doesn't seem like a good method.

Moo's question is a good example. Surely the insurance companies have better access to average rebuilding costs than the typical home owner? So, wouldn't it be better to ask for the type of construction and the square footage of the property in question? Most home owners should be able to answer these simple questions very accurately, whereas they are far less likely to know the average cost of rebuilding. The insurance company could then easily find the rebuild costs based on accurate information and price their policy accordingly.

 

[Moo]

So, since I don't know who to ask, could I ask the insurance company to send its own expert to assess potential rebuilding costs?

I'm beginning to think that I need to know as a matter of some urgency; not because a total rebuild is at all likely, but because any insurable repair would be judged on the same pro-rata basis as replacement of some of the contents. At the moment I have a nasty feeling that we're grossly underinsured!

 

[Penners]

So, since I don't know who to ask, could I ask the insurance company to send its own expert to assess potential rebuilding costs?

Would a suitably qualified surveyor perhaps be your best bet, Moo? Or perhaps your insurers would tell you whose opinion they would accept as definitive. That could be the safest way to ensure that there is no risk of argument in the event of a future claim (should - heaven forbid - the need arise).

 

[Flyfisher]

Yes, I'd be inclined to push the issue back to the insurer even to the point of asking them to confirm the rebuild cost.

I sort of did that when first insuring our place. We had a structural survey but the surveyor himself was reluctant to give a rebuilding cost. However, he put me in contact with someone else who gave me a figure. I then used this to calculate the rebuilding cost (frightening myself in the process!) and told the insurance company the basis of my calculations, which they agreed with.

This being our first listed property, I was quite surprised that the rebuild cost was more than the market value whereas it had always been less for our previous houses.

 

[Pford75]

Where should one go to get a realistic estimate of the rebuilding cost?

Moo - I would encourage everyone to have their insurers provide the figure. Not only is this likely to be more accurate, but it removes the risk of the insurers claiming 'underinsurance' in the event of a claim. Don't forget that the cover required should include costs for site clearance, reconstruction and professional costs and could therefore be considerably more than the cost of 'rebuilding'

Our insurers used a £/sq. m figure for the house, then added smaller £/sq. m figure for outbuildings, then a cost per/m for walling. Then added a lump sum figure (measured at 20% of the first 2 figures) for site clearance. This means that our total buildings cover is apx. 2.5 times the current market value of the house. Seemed slightly ridiculous when we got the first quote...but having seen the cost of rebuilding a small section of garden wall, the cost of reconstructing the entire garden wall could exceed the current market value of the house!

On the OP's question re: the bulging wall....I would caution against specifically mentioning this....since most insurers will err on the side of caution and either refuse cover or impose excessive premiums. I personally would comment that you have no detailed records of historical movement and have observed none during your period of ownership, but ask them to confirm all the details during their site visit. This puts the onus back on the insurers to determine the level of risk...but avoids a situation where you are specifically drawing their attention to something which may not be an issue.

I should point out that insurers are less willing to undertake a site vist/survey if the level of cover is on the smaller side....but for significant cover (esp. in the current climate) they should be willing to do this.

 

[Moo]

One last (I hope) question:

To whom should I write when I want to ask the insurance company to provide the estimate?

 

[Pford75]

Either your broker, or if you don't use a broker...request it on the telephone at the time of renewal/quote

 

[Penners]

To whom should I write when I want to ask the insurance company to provide the estimate?

request it on the telephone at the time of renewal/quote

This is a problem with which I am currently grappling. Nowadays, everything is done on the phone. I have had an infuriating and frustrating series of cock-ups from my current insurer, so I want to record everything that they've agreed with me on paper. But where do you send the letter? They show no postal address on their website for the Liverpool office that I've been dealing with, so I've resorted to sending the letter (recorded delivery) to their registered office. This is on the south coast - I wonder whether the letter will ever get into relevant hands.

 

[Jon Maine]

One last (I hope) question:

To whom should I write when I want to ask the insurance company to provide the estimate?

Nfu provide this service at around £700 I think, deductable from your next 5 years premiums.

Short of that go to the RICS and ask for a valuation surveyor for rebuild costs on a listed/historic property.

Any historic movement to the building which has been cleared by an engineer should not be mentioned. Insurers do not insure against structural instability normally anyway but subsidence. Just mention its an old property and you have an engineers report saying its stable if asked at all. The standard question is for subsidence of course which you should disclose as you would be insured against.

 

[skier-hughes]

When we bought our house, we got the building society to provide their "qualified" surveyor to survey the property and provide a current total rebuild cost if we had it rebuilt as is.
This was some 3 times the cost of purchasing the property.
Of course, if it did burn/fall down then it wouldn't be rebuilt as is, but as new.......

 

[Pford75]

we got the building society to provide their "qualified" surveyor to survey the property and provide a current total rebuild cost if we had it rebuilt as is

A word of caution on this. We did the same when we purchased our house. When we eventually made a claim on our buildings insurance, the insurers initially claimed we were underinsured. Based upon their valuation, there was a difference of £800k between the rebuild cost from the mortgage company and the insurers valuation. We were able to prove that we had supplied the insurers with a copy of the initial survey and that they had visited the property and therefore, by default agreed with the valuation.....but I must admit we had a couple of sleepless nights until they agree to settle....and they subsequently insisted we increased our cover.

The only truly safe way, is for the insurers to provide the figure themselves.

 

[Flyfisher]

I wonder if you could argue that you would rebuild it yourself and therefore the rebuild cost would be lower?

I bet the answer is 'no', but it's an interesting point considering how widely varying building quotes for the same job can be.

 

[Moo]

I wonder if you could argue that you would rebuild it yourself

You speak for yourself, young man! I'm sure you could, but as for the rest of us (especially the real old crocs, if Penners is to be believed) we're cutting down the amount of DIY that we're prepared to contemplate.

 

[Stephen]

As Jon mentioned in his first post on this - the insurance company are only interested in subsidence, heave or landslip because this is all they cover for in terms of movement. However, there are many forms of movement that can affect a property.

In view of the above they should not be interested in anything that is not related to the cover they provide - i.e. the bulge.

However, as others have pointed out if you ever make a claim the insurers may try to use any non-disclosure to wriggle out of the claim. On this basis it is best to keep them informed.

I note that you already have a report done a few years back saying that there was basically nothing to worry about. Provided nothing has changed I see no reason to get a new report - use what you have and save yourself some money. If the insurers want a more up to date comment get the original surveyor back to inspect and provide a supplementary update rather than a complete new report.

On the matter of reinstatement cost you should get it properly assessed. Others have pointed out that some insurance companies now provide a service whereby they assess the property and tell you what premium they want. They may not necessarily tell you how much the cover is for and if they take all risks and there is no under-insurance clause the actual level of cover (at least for the buildings) is not a concern for you. However, get them to confirm it would be like-for-like replacement so that they have to use the appropriate traditional materials and not modern alternatives (if there are modern alternatives already get them to confirm they would reinstate using traditional materials).

If you have to get your own assessment done use a surveyor experienced in this type of building and work. Valuers (i.e. those doing mortgage and market valuations) are NOT usually appropriate because their assessments are based on a standard book of modern rebuilding costs. Get a Building Surveyor or preferably a Quantity Surveyor who does this sort of work. It does cost more than you might think because they have to measure up and then calculate various bits and pieces to arrive at a figure.

[The reason mortgage companies do it so cheaply is because they use standard tables with no need for anything other than basic measurement and a 10-minute calculation. This is not the sort of thing you need for an historic building!]

To save yourself money your first option should be to find an insurer who will do its own assessment and will accept your existing surveyor's report.

 

[Penners]

the real old crocs, if Penners is to be believed

For shame, madam! The only accusation of old crockery that I've made was aimed solely at myself. You come under the heading of 'Spring Chicken'.