Listed Home Insurance: Jargon Busting Guide

Have you ever tried to navigate your home insurance journey and wondered what certain terms mean?

Listed home insurance can be confusing for homeowners due to the complexities and unique requirements associated with insuring these types of properties. Here are some of the key reasons why this type of insurance can be challenging to understand:

1. Complexity of Coverage Needs

· Different Grades of Listing: The UK categorizes listed buildings into three grades (Grade I, II*, and II), each with varying levels of protection and restrictions. Understanding which grade your property falls into and how it affects your insurance needs can be confusing. Different grades may require different levels of coverage and restoration approaches.

· Specialist Coverage Requirements: Listed properties often require specialist insurance policies that cater specifically to the building’s age, construction materials, and historical significance. Standard home insurance policies may not provide adequate coverage, especially for the unique risks associated with older, heritage buildings.

Along with the actual practical complexities of insuring listed homes, comes a set of jargon which can be difficult to comprehend. So, we thought we would provide a brief jargon-busting guide for you to get a handle on terminology used in the insurance sector.

Sums Insured. What is it and why do you need to review it?

If you’ve got your home insurance in place surely that’s the job done? Yes – partly. But have you reviewed your ‘sums insured’ lately?

What is ‘Sums Insured’?

This is the insurance world’s way of referring to the total cost of rebuilding your home from scratch. It would also include the price of any professional costs and fees – from the planning stage to the placing of the last tile on the roof. (No one likes to think of their home going through a complete re-build, but with over 3000 fires devastating homes each month in the UK it is unfortunately something of which to be made aware.)
The cost of rebuilding your property will increase over the years, so be sure to use our index-linked policy. This policy will update the ‘sums insured’ figure to reflect the changing cost of rebuilding.
However, you may also want to have a new survey completed every few years with a rebuild surveyor to be sure. We recommend Scott Brown, Risk Management Surveyors www.sbrms.com who can perform site surveys (either online or on-site) plus as a Lloyd & Whyte client, you receive a preferential rate.

What ‘Sums Insured’ is NOT.

‘Sums Insured’ is NOT the market value of your home. The market value of your home can fluctuate depending on many external factors. The re-build cost of your home is entirely different.

Is my Insurance Premium too high?

The beauty of investing the time in assessing your ‘sums insured’ value can in turn be beneficial for your premium. All too often clients estimate the value of their home and end up paying too much for their monthly premium. It’s worth checking to be sure.

Is my Insurance Premium too low?

Under-insurance can unfortunately have devastating consequences and something which you will want to avoid. Many insurers have something they call the ‘Average Clause’ which can leave you short when it comes to footing the re-build bill.

What is the Average Clause?

Let’s imagine that your heritage home is insured for £600,000, it suffers a fire and a developer quotes the rebuild cost of £1,000,000. This poses a problem for you and your insurer. In this example it can mean that you are only reimbursed 40% of the total cost because this is the stated value of your home. With this in mind you would need to find £400,000 of your own money to cover the cost of rebuilding your period property. Not a happy day.

So what can I do to avoid an astronomical bill?

Consider getting a re-build cost assessment done. According to RebuildCostAssessment, 81% of UK properties are underinsured. (001) Is your home one of them? It doesn’t have to be. We suggest getting an up-to-date rebuild cost assessment to ensure you’re not underinsured, and don’t bear the consequences at a later date.

The confusion surrounding listed home insurance stems from the unique nature of these properties and the specialized requirements they entail. The need for accurate valuations, the complexity of coverage options, the legal restrictions on repairs, and the potential for underinsurance all contribute to the challenges faced by homeowners. To navigate this complexity, it’s often advisable for owners of listed properties to work closely with insurance brokers or providers who specialize in heritage properties, ensuring they fully understand the coverage they need and the obligations they must meet to maintain it.

So what happens now?

For advice on Sums Insured, underinsurance, or related topics please speak to our advisors who will be more than happy to make sure that your home has the correct cover in place.

https://www.rebuildcostassessment.com/?gad_source=1&gclid=CjwKCAjw_Na1BhAlEiwAM-dm7C8R-0_JTjXXSSNL3iVH6GcePD_o9SG_Q4belALmzr3fOSAKS7AXABoCBHoQAvD_BwE

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