Very Comprehensive Insurance required

[Manny]

After having had to make a claim on my existing insurance recently has become clear that we are not covered for everything we would like to be. We had some water damage, but that's another story. All is well now.

It did occur to me that had this damage been caused through something happening gradually over time (degradation of building fabric perhaps) that we wouldn't be covered. The policy is just bog standard insurance that you'd get from anywhere.

So what do other people use? Is there some generally accepted and very comprehensive insurance for listed buildings that I should think about getting?

 

[Pford75]

Months of insurance wrangling, lots of threads here...boiled down to a few key points:-

1. No insurer will ever cover 'gradually operating cause' and this is particularly pertinent to period properties. Damp, rot etc will all be considered GOC and not covered

2. Many insurers do not appreciate the true costs of rebuilding/repairing a period property (especially if it is listed). Scarcity of trades, uniqueness of materials, standard of workmanship all contribute to higher than average costs.

3. Ensure your policy is based upon an 'agreed value' - ie. The insurer accepts that the rebuild cost is accurate (preferably supplied by them after a survey). That will avoid any underinsurance claims.

4. Avoid 'bog standard' insurers - many have no clue when dealing with PP's

5. Names which rank consistently highly are: NFU, Hiscox, Zurich Private Clients

 

[JoceAndChris]

Like you, I had a panic earlier this year and switched the policy to NFU. They've been a delight and just coughed up £3200, the full amount we asked for after our recent burglary. (which has actually been something of a godsend as they haven't insisted we buy identical things - and could even have blown the whole lot on a painting and they wouldn't have minded).

I haven't had to make a claim for flood or fire or acts of God thankfully. They have accepted the rebuild cost of our property at 350,000 - a figure supplied by our initial surveyor. Whether we could really rebuild BC for 350 if it burned to the ground, hmm. I think it would be hard without a lot of DIY. (However even I wouldn't want to do a like for like reproduction if that awful scenario occured).

Chris often muses as to whether they'd cover us if the soakaway suddenly stopped working or something of that nature. As explained by others already, I doubt it, as these things gradually wear out.

Another good point about NFU, for us, was that they didn't ask any awkward questions about trees. As our hedgerows have become copses in places this was a great relief. There is a particularly worrisome silver birch. I'm sure if it fell on the roof and destroyed it we wouldn't be covered though. The plan is to fell the silver birch so I didn't feel the need to mention it to them.

 

[Flyfisher]

We're also with NFU and recently had a good experience with claiming after the diamond fell out of Mrs FF's engagement ring.

We'd only recently changed to NFU and went for their 'cover plus' (or whatever it's called) policy because of it's wider range of 'all-risk' cover. So, we sent in details of the claim only to discover that jewellery was not covered by our policy! It turned out that although the policy brochure specifically mentioned jewellery, the actual policy itself specifically excluded the cover. Red faces all round!

However, our local NFU office through which we had discussed the policy and out requirements was fantastic. They argued our case with head office, which resulted in a change to their literature, retrospectively added the jewellery cover supplement to our policy at no cost (would have been an additional £25 I recall), processed and paid our claim within a few weeks and sent a case of wine for the trouble caused.

I'm as cynical as anyone regarding insurance companies wriggling out of claims but our experience was that they really were on our side and were prepared to 'do the right thing' rather than fall back on the small print to avoid a claim. And, as Joce has noted, they didn't want a receipt for the replacement, they just paid out the agreed amount. Frankly, what more could anyone ask from an insurance company?

I know this reads like an advert, but I have no connection with NFU except as a very satisfied policyholder.

 

[Penners]

had this damage been caused through something happening gradually over time (degradation of building fabric perhaps) that we wouldn't be covered.

You've had some good recommendations above, but I shouldn't anticipate any insurer being prepared to cover you against anything that happens gradually over time. As Pford75 says above, gradually operating causes are pretty well uninsurable.

 

[MdB]

Something that I didn't realise before somebody mentioned it here before, with a modern house, the rebuild cost is typically half to two thirds the value of the property with the rest being the value of the land. With a period property, the rebuild cost is typically many times the actual value of the property. I think rebuild values twice to four times the actual value have been mentioned due to the cost of the construction methods. It is therefore very important that the insurance company agrees that the rebuild figure is correct and covers you sensibly. If you supply the rebuild figure without getting the insurance company agreeing to it and make a claim, the insurance company can claim that the figure was wrong, that you are under insured and that they won't pay the full amount.

 

[JoceAndChris]

That's an interesting point MdB. So, if you think the worth of your house is 400,000k can you tell the insurer the rebuild cost is 1.2 million? It seems rather steep.

 

[Flyfisher]

MdB is right, the rebuild cost is not really related to the market value of the property.

The rebuild cost of our Hertfordshire house (1950s) was about 1/3rd its market value (it was in a stupidly expensive area) whereas the rebuild cost of our period house is about twice its market value, although that was based on the market valuation when we took it on and I'd like to think it's worth a bit more now after all the work I've done to repair it, so perhaps the figure is more like 1.5x market value. That was based on a £1400/m2 rebuild cost.

If, heaven forbid, someone does find themselves with a pile of smoking rubble and timbers (i.e. a total loss) how does the insurance company actually decide, at that point in time, what the actual re-build cost will be? If, say the house was insured for £100k but they get builders estimates for £200k then they could argue the house was 50% under-insured and only pay out 50% of the value insured, i.e. £50k. But what if you could supply a rebuild quotation for £100k? Would they accept that as proof of adequate insurance and pay out £100k?

My thinking is that there are many self-builders out there who could rebuild the house themselves and would not require a commercial quote.

This might be a useful starting point for checking rebuild costs. As we've noted before, period properties are unique and generally more expensive to rebuild than the sorts of properties covered by this calculator, but it could be a useful 'sanity check': http://calculator.bcis.co.uk/index.cfm#calculatornotes

 

[MdB]

That's an interesting point MdB. So, if you think the worth of your house is 400,000k can you tell the insurer the rebuild cost is 1.2 million? It seems rather steep.

You have to.

Lets say you have a modern house and period house next door to each other and both are worth £400k. The modern house has a rebuild value of £300k and the period house has a rebuild value of £1.2M. Lets say a tree falls on both and damages 10% of each. The modern house costs £30k to fix and the period house costs £120k to fix.

The problem comes if the period house is insured for £300k rebuild rather than £1.2M. In this case the insurance company will say that it is a factor of four under insured and will only pay out £30k of the repair bill rather than the full £120k. The important thing to note is that many insurers only look into a correct rebuild valuation of the property when it comes to a claim being made and put the onus on the householder to give them the correct value when insurance is taken out. It is therefore important to get the insurer to agree that the rebuild value is correct.

 

[Pford75]

Also bear in mind that in the event of a major claim (fire, flood etc.) there are many costs in addition to the rebuild cost.....site clearance, surveyors fees, potentially architects fees, structural engineers etc.

On our wall claim, these additional costs amounted to over £20,000 :x

Following our claim, our insurers calculated our rebuild cost at a considerably higher level than the value of the property (apx. twice the current value). Seems ridiculous, but a section of flint walling cost (in total) more than £100k. Although a total loss of all the wall is highly unlikely (except perhaps a meteor strike), the wall alone would cost £500k+ based upon an extrapolation of the cost/length.

Good to hear the positive stories about NFU - we are waiting until 3 years passes after our claim (so we no longer have to declare it) and then will be switching from Brit to NFU

 

[MatthewC]

I thought FF's recommendation of NFU was most opportune, but sadly I just found that they don't insure uninhabitable buildings...

My new purchase won't be habitable for nine months. Does anyone have an ideas who I could approach?

 

[JoceAndChris]

Goodness me - thanks for all this. My house is still under insured then, even with NFU. I'll attempt to change it next time around.

At least we have smoke alarms for this winter!

 

[Pford75]

by MatthewC on Fri 8th Oct, 2010 4:28

I thought FF's recommendation of NFU was most opportune, but sadly I just found that they don't insure uninhabitable buildings...

My new purchase won't be habitable for nine months. Does anyone have an ideas who I could approach?

Sounds like you need a more specialist policy - I would try a broker (La Playa advertise on PPUK) and I can recommend Aon Private Clients. They will find a specialist policy....but do change when the building is habitable as you will pay over the odds for the next 9 months