Buying the right home insurance

Buying home insurance? Take extra care.

Paying too much for your home insurance would be annoying. Paying too little could be disastrous.

We want to protect our homes and contents because they are probably our biggest assets. However, we are not all made of money and so we don't want to pay a fortune in home insurance.

It might be a serious mistake, however, to look for the very cheapest home insurance possible, because there are many risks that a home owner faces, and in too many cases they find that either they are underinsured for some of these, or perhaps not even covered at all.

Here are some of the commonest risks which result in home insurance claims. Are you covered against them all?

Storm damage

Storms can occur at any time of the year and can cause tremendous damage to houses with chimney stacks collapsing, ridge and roof tiles getting blown off, and even trees being blown down and crashing into houses. An open and shut case for insurance compensation? Not necessarily.

Insurance companies expect us to carry out reasonable maintenance of our homes and if the assessor concludes that this has not been carried out, or damage has been caused mainly by fair wear and tear, a claim may be refused or reduced.

Insurance companies have access to not only regional but also local weather conditions and they can pinpoint, for instance, what the wind speed was in a particular postcode at a certain time on a certain day. if it is not considered to be high enough to cause damage, then a claim could well be rejected.

Most proposal forms ask about trees in the proximity of a house; most particularly how close, and how tall they are. This is because of the real possibility of trees being blown down and causing substantial damage to a house.

Many trees, however, can grow substantially in fairly short times. It is entirely possible for one which was no danger to a home when a proposal form was first filled out, perhaps many years ago, to eventually get high enough to topple over in a high wind and smash into the roof. In this event there is again a danger that an insurance company could refuse a claim.

The lesson is to keep an eye on any trees near to the house that may cause a potential problem, even if they are growing on your next-door neighbour's property. If they looked like causing an issue you should inform your insurers in good time, or take remedial action to remove the danger.

Water ingress

This is one of the most common causes of claims and freezing of pipes during very cold weather, causing bursts, is the usual cause.

Water flooding from a burst water pipe can cause considerable damage, particularly if it occurs in the loft. In this case bedrooms as well as the rooms underneath can be ruined. Doors and floor joists can warp, flooring (particularly chipboard) can be destroyed, furniture and electrical goods get ruined.

The cost of repairing a burst pipe can be fairly small but the cost of repairing the damage that it has caused can be very substantial. Unfortunately however a large number of claims for water damage are turned down every year, because the insurer considers that the home owner has been careless.

A major cause of disputes about water damage happen when homeowners go off on an extended holiday in winter. Heating is often turned off which saves money but can also result in freezing of pipes. Even when it is turned on automatically at regular intervals there is still a considerable danger of pipes in the loft bursting, because many people put insulation over the top of their bedroom ceilings. This may keep the house itself warm but it prevents heat from rising up to exposed water pipes.

It is essential that water pipes are sufficiently lagged. Preferably any fibreglass lagging should be placed over, and definitely not under, any pipes in the loft.

Theft

Sadly there are more burglaries in Britain than in any other country in Europe. Whilst the average home contents insurance policy covers goods and possessions that are stolen the damage that burglars can do can be considerable and very often the victims of a burglary find that they are underinsured.

The biggest danger however is finding that the insurance company quibbles over whether or not the occupants were partly responsible for the break-in. Habitually leaving a key under the doormat or in a plant pot by the side of the door is an obvious mistake but also a very common one; and far too many people advertise the fact that they are away on holiday on social media platforms such as Facebook. They may just as well issue a general invitation to every burglar in the vicinity to break into their house.

If you do leave your house unattended for anything less than a short period an effective burglar alarm system is not expensive and is a cheap deterrent to casual break-ins.

Accidental damage

Many cheaper home insurance policies do not cover accidental damage. Spill drinks on an expensive carpet, knock over a valuable vase, fit the wrong plug to a sophisticated hi-fi system, and the cost of putting it right may be a lot more than you expect.

Take a look at your insurance policy and if you have belongings, furnishings, or fixtures and fittings that are particularly valuable you may wish to make sure that they are covered against accidental damage.

Fire

Fire can not only destroy your house but it can also wreck any other houses that yours is attached to, if it is a terraced or semi-detached property. Make sure that the sum assured is sufficient to cover the cost of any potential claim against you.

Subsidence

This can be a nightmare for homeowners since it can not only cost a fortune to rectify but can also make a house very difficult to sell. Unfortunately it can be a general problem which affects a large number of houses in particular areas where they have been built on soft ground.

You should consider this problem before you even buy a house. If a nearby road is called 'Moss Lane' or something like that it is likely that the area was boggy at sometime in the past. Ask your solicitor to find out whether or not other houses in the vicinity have had subsidence problems. If you buy a house which has suffered from subsidence in the past, make sure that you provide full information about this to your insurer, otherwise they may well turn down any claim.

Do bear in mind that even if you are fully insured against subsidence there is normally a substantial excess that you will have to pay yourself towards any necessary treatments.

Vandalism

This is unfortunately a widespread social problem. If the area that you live in suffers from malicious damage then a discreet security system may be a good idea; we use the term 'discreet' because many low lifes see them as a challenge! Do be careful you do not breach any privacy regulations; setting up a camera system which records people going about their normal business can upset neighbours considerably.

Flooding

As pressure on housing grows there is a temptation for local authorities to allow more and more houses to be built on areas that may be subject to flooding. This is again something to check on carefully before you buy a house. Living close to a river or canal can be a very obvious red flag.

Flooding not only ruins houses and their contents but it pollutes them as well as drains overflow and it can take many months for a house to dry out after wet plaster work has been hacked off and replaced. The cost and inconvenience can be extremely stressful for even the strongest people.

Unfortunately there is no law that says an insurance company must agree to insure any house and many of them will not consider providing cover for one which has suffered flood damage in the past, or which they consider may do so in the future.

You should always find out from the local authority whether or not a house, or the area it has been built on, has been subjected flooding in the past, and if so you should at least inform your insurance company of this; or even walk away and buy one elsewhere.

Being underinsured

Underinsurance is one of the commonest causes of disputes between homeowners and their insurers. Many people greatly underestimate the potential cost of rebuilding their houses in the event of a complete disaster or replacing their contents with new ones.

A common practice amongst insurance companies is proportioning claims. Let us imagine that, for instance, the rebuilding cost that your house is insured for is £300,000, but the insurance assessor calculates that it should have been £400,000. You could therefore be considered to be 25% underinsured.

You then subsequently put in a claim for, let us say, £10,000. The assessor calculates that since you are 25% underinsured the payout from your insurance company can therefore be reduced by 25%.

You should always make sure that the amount that you are insured for is adequate. Many cheaper insurance policies have fixed limits that they will pay out, whereas often, for paying a little more, the amount covered is far more than you would ever reasonably expect to have to claim.

Drains

Many insurance policies cover the cost of repairing accidentally damaged drains. However repairing a broken piece of drainpipe is one thing; finding the broken parts can be a different matter altogether and may involve extensive digging up and then relaying of driveways, some of which may not even be on your own property. Costs can therefore be considerable.

Insurance companies will usually only pay out if a drain has been damaged accidentally. Common causes of this are heavy vehicles driving over them. Unfortunately a very high number of drain problems are caused by tree roots which find the tiniest gaps between sections of pipe but then extend into the whole system and grow as they seek out more water for the tree above. Whether or not an insurer covers for this type of damage will vary from one policy to another.

You may wish to ensure that your insurance policy will cover, if necessary, investigative work to find out exactly what is causing the drain problem in the first place; and the subsequent making good of all disturbed surfaces, including relaying drives if these have had to be disturbed.

It is important not to have drain repairs carried out before an insurer has had a chance to inspect the problem first; this is often expressly stipulated in insurance contracts.

Impact damage

The possibility of an aeroplane or meteorite hitting your house is remote but for some houses, particularly on country lanes, the possibility of it being hit by a vehicle is real. Use common sense here; whilst a suburban semi on a quiet road is unlikely to be hit by a vehicle it is an ever present possibility for some houses on bends of fast narrow roads, and finding a lorry in the living room can be a very expensive surprise.

Having said that, as a young builder I had to rebuild the front of an attached garage when the owner, in a rush, put the large family car into reverse instead of forward drive; and no they were not insured for impact damage, and their car insurer didn't pay up either since the car was not on a public road at the time!