Make sure you are covered for when trouble blows in
St Jude's Storm emphasises the importance of being prepared for winter calamities, says Chiara Cavaglieri
Saturday 02 November 2013
Hurricane-force winds aren't something we see too often, but St Jude's storm was a timely reminder that the winter months can take their toll on our homes.
Common claims during bouts of bad weather include aerial damage, roof tiles being blown off, trees and boundary walls falling down, damaged gutters and broken glass.
Even seemingly innocent occasions can cause havoc – almost a quarter of UK households have paid an average of £227 to repair damage caused on Hallowe'en and Bonfire night, according to a new Santander survey, while Aviva found there are 22 per cent more thefts reported on Bonfire night compared with the average day.
Whether you're dealing with storms and floods, or stray fireworks, having the right policy in place could save you from digging deep into your pocket.
To protect the property, you'll need buildings insurance. Mortgage lenders will insist you have this in place before they give you a loan but there is no onus to buy a policy from them. If they do try to flog their own product, compare the premiums with the rest of the market and make sure the level of cover is adequate.
"It is essential that the correct sum insured is declared at the start of any home insurance policy to avoid the risks of being underinsured when it comes to making a claim. For buildings insurance, you must base the sum insured on the rebuild cost and not the value of your property," says Mike Powell, insurance analyst at Defaqto.
You can pay a surveyor to work out the rebuild cost for you, or use the calculator on the Association of British Insurers' website (abi.bcis.co.uk). Today, many insurers automatically provide a flat sum (of £250,000 or £500,000 plus) which can make life much easier, but you will still need to inform them if you make improvements such as an extension, or central heating.
Home contents cover is for possessions inside the house including clothing, furniture, white goods and personal belongings. Many households underestimate the value of their contents. You may even be tempted to do this on purpose to reduce your premiums, but be warned you will end up paying more in the long run. This is because insurers use "averaging" clauses and will only pay out a proportion of the claim if you are underinsured. As an example, if you have £20,000 worth of contents cover but your possessions are actually worth £40,000, the insurer will only pay out for half of any claim.
Draw up a list of items in your house room by room including clothing, curtains and carpets, electronics and items in the garden or shed. Photographs and receipts will make claiming easier, but remember to calculate the cost of replacing these items at today's prices, not what you paid for them. If you have valuable items such as antiques, get an expert valuation. Art lovers are urged to list prized paintings on their policy after new research found that the average value of art in people's homes stands at £531.
Gareth Lane, head of home insurance at Confused.com, says: "More than a third of people have not had their art work valued, despite the cost generally increasing over time." Watch out for exclusions. Firstly, there is usually a compulsory excess to pay (the minimum amount you need to contribute towards the cost of a claim) of around £50-£100. If your property is at risk of subsidence the mandatory excess could be more like £1,000, or even £5,000 if you've made a claim in the past. You may be able to add a voluntary additional excess which can reduce your monthly premiums. Make sure you can comfortably afford to cover this excess in the event of a claim though – if it's so high that you're put off from making a claim, the whole policy will be a waste of money.
You may be surprised as to what is and isn't covered under your policy. Fences, gateposts and outbuildings aren't usually covered as standard, for example, and buildings insurance doesn't cover gradual deterioration, so that rules out rising damp and infestations such as dry rot and woodworm. Some lenders even require winds to achieve certain speeds before paying out for any damage they cause so always check the small print carefully.
If you leave your property unoccupied for a long time, typically 30 days in a row, your insurer might refuse to pay out for damage caused by things like escape of water. Cover for accidental damage cover (including DIY disasters) and home emergencies usually have to be added as optional extras.
You also need to do your bit to protect your home by fixing problems as soon as possible and making regular maintenance checks to detect issues early on. The insurer needs to know that you keep your gutters clear, check the roof tiles and insulate pipes. They could refuse any claim for damage if they can identify "gradually operating causes". For example, if you had loose tiles and they were dislodged by the storm the insurer might argue that you're partly responsible. Fortunately, home insurance premiums have been falling since 2012, says the latest AA British Insurance Premium Index. Buildings cover costs around £129, down 5.8 per cent over the 12 months to 30 September, while contents cover costs £69, down 3.8 per cent over the same period. It is often cheaper to buy both from the same company.
Some insurers will also shave off 5 or 10 per cent if you fit alarms and premium locks on your doors and windows. You can also build up no-claims discounts with many insurers including Nationwide, which offers up to 35 per cent on contents and up to 10 per cent on buildings if you have been claim-free for up to five years.
As a final word of warning, never automatically renew your annual policy. You should be sent a letter about three weeks before it is due to expire so use this time to get quotes for a cheaper policy. You can use this to haggle with your provider and if they don't play ball, you're free to cancel and switch to a new insurer.
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