buidlings insurance for two flats in a converted terraced house

[Imee]

Hi everyone, I am a freeholder of a terraced house converted into 2 flats. I also own and occupy the ground floor flat. I phoned HSBC for a buildings insurance quote and they referred me to their partner, Premium Scanner, who quoted £850 premium. I also phoned Halifax and was quoted £333. The difference between the two is that Halifax is essentially covering a “terraced house” with a total of 4 bedrooms (the flats have 2-bedrooms each), where as Premium scanner is covering “two self-contained 2-bedroom flats in a converted terraced house.” My question is, should I go ahead with Premium Scanner because it is a specialist insurance provider and would therefore provide me with the correct building insurance? It’s very tempting to go for Halifax but I’m not sure about them simplifying it to just a 4-bedroom property, implying that it is owned and occupied by only one family! Also, my upstairs neighbours are planning to rent out their flat, which will make it even more complicated because the ground floor flat is owner-occupied and first floor flat will be tenant-occupied! Any comments/advice will be greatly appreciated! Thanks in advance!

[JK0]

There is no point in taking insurance based on a lie as it will never pay out.

[Imee]

There is no point in taking insurance based on a lie as it will never pay out.

This is exactly what I thought when I spoke to the Halifax agent. She referred me to her manager, who reassured me that they do this all the time. I asked them if they could specify in the policy that it is a converted house split into 2 flats, but he said he could not do that, instead he could add a "note" in the policy stating the names of the owners of the first floor flat.

[JK0]

[JK0 name deleted] do it all the time?

How corrupt eh? Fancy taking money off people for a policy they know they'll never have to pay out on.

[ashburnham]

Certainly avoid the Halifax policy unless they can specifically put in the policy schedule that the property being insured is a terraced house converted into two self contained flats.

The PS policy sounds very expensive unless we are talking an extremely large property and/or other issues (i.e. flood/subsidence/claims history, etc.).

I think your best option will be to get another few quotes before making your decision. A good landlords insurance broker will be able to give you an insurance policy exactly to your needs and almost certainly at a lot better price.

You can always visit the LandlordZONE Insurance Directory for some ideas.

[Imee]

Thanks ashburnham for your advice. I'll have a look at the insurance directory and hopefully get something less expensive than Premium Scanner.

[bandontherun]

Certainly two flats formed out of a terraced house is a very different risk to one terraced house. You need a property owners' policy rather than a homeowners' policy. There are all sorts of added elements of cover such as cost of alternative accommodation cover for two households rather than one in the event of major loss rendering the property unoccupiable (or loss of rent cover if one of the flats is sub-let or under a contract to be sub-let), access and trace cover, loss of metered supplies, adequate cover for the property owned and, critically, non invalidation cover; ie covering you for something your lessees or their occupiers do of which you are unaware and which would otherwise invalidate the cover under the policy. Terrorism cover normally has to be bought back from the Government scheme "Pool Re" (whereas it is inclusive on a householders) or as they say in the insurance trade, a "PDH" policy (private dwelling house). You should take out the terrorism extension because your leaseholder will have your covenant to insure "comprehensively".

[anjo56]

Hi
We also have 2 flats in a terraced house. We struggled with insurance also and found mainstream insurers weren't prepared to cover. We eventually went through a broker and are now insured via Nelson. We haven't had to claim. The premium is currently £827. I wouldn't take any risks as far as insurance goes. Best of luck.

[Gordon999]

Anjo50,

What re-instatement value have you insured for your building to cost 827 pounds ?

Did you have any previous claims record within last 3 years ?

[anjo56]

Hi Gordon 999
Reinstatement value £260k - don' recall how we ended up at that number but remember discussions around it at the time.

Bandontherun
You raise some interesting points re propery owner's vs householder insurance.

With both of your comments, am now wondering if our insurance is fit for purpose and will check in more detail what we have. Thanks