View Full Version : Sufficient Insurance
08-12-2006, 12:26 PM
I've just paid over £200 to have my building valued for insurance reinstatement purposes. The report shows that I was under insured by twenty per cent. I've now upped my insurance cover.
I sincerely hope that all the people who have recently suffered as a result of the bad weather and tornadoes are sufficiently insured (both buildings and contents). Or insured at all?
I expect that the couple hundred pounds spent revaluing today, coupled with insuring at the correct level will ensure that I won't come a cropper as a result of some unforeseen event in future.
Are you sufficiently insured?
10-12-2006, 23:27 PM
Presumably because your real 'rebuild' value had departed from the extrapolated (index-linked?) figure your insurers had been working to...? How long had it been since you'd last had the place valued, out of interest? I'm wondering how long it takes for the figure you obtain when you buy a property to go signifcantly out of step with reality.
11-12-2006, 12:44 PM
It was last valued 11 years ago when I purchased.
11-12-2006, 14:00 PM
It is very important that you review the sum insured of your buildings cover to ensure that it is sufficient. Some may underinsure their property to reduce the premium payable but this can prove to be a false economy if you need to claim on your policy. The amount payable for a claim can be reduced by the insurer if the sum insured of the policy is insufficient for the property.
A survey by a qualified person is the only real way to get the figure right but why not visit http://calculator.bcis.co.uk/, a calculator on the Royal Institute of Chartered Surveyors website to give a guide as to whether your buildings are sufficiently insured.
at UKinsuranceNET, we do have a lot of customers who alter the sum assured of their policy mid term after a valuation for mortgage purposes which may suggest that if not surveyed or reviewed for some years then then sums insured can become incorrect, even with indexation.
I would add that it is up to the individual to ensure they have sufficient cover and to seek advice if they are unsure, if paying for a survey is not an option.
visit www.landlords-building-insurance.co.uk to submit an enquiry or purchase landlords insurance online
11-12-2006, 14:08 PM
Members should be aware that those online calculators are only of vague use for not very old, conventional houses with two storeys or less.
11-12-2006, 14:30 PM
Also remeber that reinstatement cost is not same thing as market value; latter could be lower, but is usually higher.
If you claim on a policy when property is under-insured on reinstatement value, insurer may scale down claim pro-rata.
02-02-2007, 10:53 AM
Flat owners at risk of having dual insurance
Flat owners may be individually insuring their property in a block of flats with some direct insurers; a move that one broker believes amounts to unethical practice.
Neil Cook, of independent intermediary Delite Insurance Agency, claimed that taking out individual building cover for a flat in a block was unethical and accused some direct writers of mis-selling cover.
He commented: "This leaves major issues about reinstatement, if there is a claim for example, and it is also not giving good advice. The public needs to be made aware of this and brokers should also be aware and use it as a tool to get back into the market."
Mr Cook became aware of the problem when managing the insurance for a client's premises: "I was surprised when he said his bank had persuaded him to take out building cover when he arranged his mortgage with them four years ago. This was despite living in a flat that was part of a block of eight.
"Lenders are not supposed to insist that you take out building insurance, but word their letters to make you think that you should."
Traditionally, a flat is insured as part of the block and often flat owners pay insurance as part of their service charge: "I have heard of cases of insurance being paid as part of the service charge and charged by the lender too," added Mr Cook. "It is overly unnecessary and complicated if people are enticed to insure single flats because they don't realise that they may already be covered. I would say that about 25% of flat owners are dual insured."
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