It has been highlighted recently that out of the 500,000 or so listed buildings in the UK a vast number of owners only have a standard buildings insurance policy in place.
Whilst many home insurers will provide insurance cover on these properties, many will not take into account the specialist cost of repairing listed houses unless the sum insured chosen to insure these properties reflects the additional cost.
Many homeowners can find themselves liable for any shortfall to put the property back to its original state. This is because insurers apply a term called ‘average’. Let’s say that a property was insured for £200,000. A fire then occurs and the claims adjusters find that the property should’ve been insured for £400,000 due to the specialist nature of the repair works needed to comply with the listed building status. Now let’s assume that the claim was for £100,000, but as the amount insured was only half of what it should’ve been, then only £50,000 (half of the claim) would be paid. This sounds harsh, but the insurers have a valid point in that if this rule was not applied, those policyholders who insured their property accurately would, quite rightly, feel they are subsidising those who don’t, yet still have the benefit of full insurance cover.
A case reported in the Mail On Sunday highlighted the need for specialist advice. A retired GP and his wife own a timber framed Grade 2 Listed 15th century farmhouse. They took out a home insurance policy that cost them £2000 to insure the premises with the correct cost of rebuild value. Their property subsequently suffered a serious flood where 25 inches of water stood for 6 days. The total claim came close to £273,000 – much greater than the cost of repairing an average modern non-listed property. The couple were very pleased to have paid for quality cover and the claim was paid in full.
By obtaining professional valuations and speaking to a specialist insurance broker, listed building insurance, thatched building insurance and even landlord building insurance policies can be purchased giving thorough cover in the event of a catastrophe. The important thing to remember is that the rebuild value of a property is not the same as the market value. The only correct method to get a true evaluation cost of a complete rebuild is through professional evaluation companies. However there is a tool available on the ABI’s website to provide an indication on the rebuild value.
Active Insurance have been providing advise and excellent levels of covers to homeowners throughout the UK since 1993. Offering quotations on standard house insurance, non-standard property and listed properties.
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