How to Take out a Property Policy
People are generally confused when they take out a property damage policy as they sometimes think that they should insure for the market value of the house instead of the full rebuild cost. The full rebuild cost is as follows
- Demolish the property and clear the site
- Rebuild the property to the same level of finishes as before
- Professional fees
The above is referred to as the ‘buildings sum insured’. The best way to calculate this is by visiting the SCS (Society for Chartered Surveyors) website. They have a calculator which will ask you the following questions for a standard house
- The internal area of your house in square feet or metres
- The region where the property is?
- Higher than average kitchen.
- Built in wardrobes.
- Special finishes e.g. Hardwood floors
- Perimeter fences /walls
- Additional items e.g. handicap ramps, elevators
If you have an older property e.g. Victorian, Georgian or stone or commercial then the standard calculator above wont suffice and you’ll need to engage a chartered surveyor. If you don’t insure yourself adequately your insurer may apply ‘average’ in the event of a claim (e.g. if you’re 50% underinsured your insurer will only pay 50% of the claim)
Policies generally cover the full replacement value of all contents i.e. new for old. There are exceptions for certain items like clothing, household linen, sports equipment, bicycles or floor coverings more than 12 months old the insurance company will apply a ‘wear and tear’ deduction. Most people take a guess at the replacement value of their contents but to calculate correctly one should go room by room and make a list. To understand contents imagine taking the roof off your house and turning the house upside-down everything that falls out is contents with the addition of carpets and curtains. Anything generally that is screw attached to the walls/floors (e.g. built in wardrobes, kitchens) is buildings.
It is vital that all questions are answered honestly and accurately. Not declaring a previous claim for example could void the policy. Insurers may ask the following
- Percentage of your roof that’s flat (as opposed to pitched)
- Distance from rivers/streams/coastline
- When the property was built
- Details of previous insurer
- Any criminal convictions
- Burglar alarms /smoke detectors
If you have any issues with the above, it may be wise to use an insurance broker.
If you have a claim, have it professionally assessed. In Property Claims Loss Assessors Ltd we are Engineers and Building Surveyors with over 20 years’ experience. We assess damage from pipe leaks, storm, flood, subsidence, break-ins, fires, etc. Our first survey is free and we are a ‘no win no fee’ company.