Since acquiring your home is likely to be the most expensive financial decision you will ever make, it is amazing how cavalier many are in protecting that investment
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Good buildings insurance is vital and, as anyone who has ever had to claim will confirm, it needs to be comprehensive.
Budget deals, often promoted by comparison websites, are unlikely to honour anything other than basic claims. If using the internet, it is vital to drill down into the small print to check not just the terms and conditions but omissions which better policies regard as standard. Remember, too, that several major underwriters are omitted as they will not pay the fees charged by comparison networks.
Do not accept the apparently friendly aphorisms, endorsed perhaps by a former soap opera actor, but instead seek advice from an experienced insurance broker who has both the qualifications and experience, such as knowing which underwriters pay promptly.
A broker will also know who is behind a particular brand and if the same insurer may offer a policy more suited to your personal circumstances. A call centre with scripted responses is often dystopian to informed enquiries.
Buildings cover is to protect the fabric with its fixtures and fittings. It is the state in which a property is sold. The contents is excluded. A common fallacy is to insure for the value of a property. This is incorrect and cover should be for the rebuilding costs with an allowance for associated expenses, such as alternative accommodation.
A good insurer should not expect a claimant to live with the noise, perhaps damp and restricted access whilst work is undertaken.
It should arrange nearby accommodation, which may be a hotel or for longer periods a mobile caravan. Covea will even book and pay for a family pet, such as a cat or dog, to be housed at a cattery or kennels.
There are helpful websites for rebuilding rates but a chartered surveyor with residential property knowledge of the area should be consulted, at least every five years.
Increasingly, insurers try to combine buildings and contents cover but it is probably better to seek separate policies which reflect personal needs. Some try to sell packages with legal advice or helplines to contact tradesmen if an emergency should arise.
Aviva have revealed to The Yorkshire Post the five top reasons for claiming:
Damage to underground pipes and services
Accidental damage, such as to fixed sanitary fittings like bathroom sinks
Theft with forced entry.
Water claims, both in frequency and cost, are rising more than any other. Hiscox, a noted high end insurer, says that the reasons include a move to open plan living, an increased number of bathrooms in each property, concealed plumbing and greater demand on old plumbing systems.
To counter water problems, Hiscox recommends installing leak detection devices, keeping your property appropriately heated throughout winter and ensuring early signs of a potential leak – such as damp spots – are acted on quickly. It also suggests that you know where the stock cock is located and can access it easily in the event of a leak.
Insurers differ on the amount of each excess. The standard examples and typical rates are escape of water (£350) and subsidence, ground heave and landslip (£1,000).
Usually it is possible to increase the level of excess if a claim should arise in exchange for a lower premium.
Accidental damage, such as scorching the kitchen work surface with an iron, is a crucial element and is usually offered for an extra premium. Another popular accident is to put a foot through a ceiling.
Some insurers include elements of accidental damage as ‘standard’, such as Rias, which is an Ageas brand. Its cover includes for underground pipes and drains serving the home.
The Association of British Insurers says that whilst the number of claims has fallen, the values are rising. Last year insurers paid £8m to homeowners where properties had been damaged by unwelcome, unexpected events such as flood or fire.
Terrorism cover is excluded from most standard domestic property but can be purchased as a stand-alone policy for blocks of flats. It is a wise precaution to have this element as otherwise any standard claim which is terrorist-related will be invalidated.
Do not overlook cover offered through supermarkets. They often have undertaken research to find well-worded policies and have a diverse panel to cater for different needs.
Sainsbury’s Bank, for instance, has seven underwriters on its panel including Axa, Prestige and RSA (founded as Sun Insurance in 1706), headquartered respectively in Paris, Belfast and London.
Check if your bank offers buildings cover. If your own does not provide a scheme, others may be open. Yorkshire Bank, now part of CYBG, offers policies that are not restricted to existing account customers. Underwritten by Royal Sun Alliance (RSA), the standard excess is just £100 but this can be reduced to £50 or increased to £500.
Saga, which targets the over-50 year-olds, allows excess choices from zero to £500 with £150 the most typical. Its panel of 12 underwriters includes AICL, Covea, Lloyds and RSA. Saga provides a complimentary ‘home emergency’ service which means help can be given 24 hours a day for such incidents as roof damage, broken doors and windows, blocked drains and burst pipes.
Its policies are comprehensive, such as including trace and access of a water or oil leak and reinstatement of any damage caused which is not generally offered.
Nationwide, the largest building society, uses RSA as its underwriter with 40 per cent of members selecting a £200 excess.
Rather than having to purchase enhancements that may not be required, Nationwide allows members to select, such as legal assistance, bicycle and garden cover and home emergency. At renewal, look at comparative terms and quotations, particularly as up to 43 per cent can be saved by switching, according to the website Money Supermarket. However, loyalty may pay as an apparently cheaper policy may be less generous with its terms.
If considering a change, check with the publicly available information from the Financial Ombudsman as to the number of claims it has investigated about buildings insurers.
This may make sepulchral reading but reveal those who are unresponsive and not as consumer-friendly as could be expected.
Finally, to make homes winter-ready, take Aviva’s advice to check your roof for missing or damaged tiles or slates as water can spread far and wide, to call out a chimney sweep and to clear gutters and drains so that water can drain freely.
Conal Gregory is AIC Regional Journalist of the Year.