Thatched Roof Home Insurance – Jargon Busting
If you have your thatched roof home insurance in place surely that’s the job done? To a certain extent, yes, but have you reviewed your ‘sums insured’ lately?
What does ‘sums insured’ mean
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. While no one likes to think of their home going through a complete rebuild, with over 34,000 house fires devastating homes in the UK last year, it is worth taking these statistics into consideration.1
The cost of rebuilding your property will increase over the years, so using our index-linked policy can help you keep your insurance up to date. This policy will update the ‘sums insured’ figure to reflect the changing cost of rebuilding.
What ‘sums insured’ isn’t
Your property’s ‘sums insured’ is not the market value of your home. The market value of your home can fluctuate depending on many external factors. The rebuild cost of your home is entirely different and this is what insurers base ‘sums insured’ on. The rebuild cost factors in the price of building materials, specialist building materials such as a certain type of thatch, or construction materials, and the rates charged by skilled and specialist tradespeople.
Is my insurance premium too high?
The beauty of investing time in assessing your ‘sums insured’ 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, so it is worth checking to make sure you have an accurate level of cover.
Is my insurance premium too low?
Underinsurance 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 financially ‘short’ when it comes to the rebuild costs.
What is the Average Clause?
Let’s imagine that your thatched or listed home is insured for £600,000. It suffers a fire and a developer quotes a 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 building sums insured 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.
So what can I do to avoid an astronomical bill?
According to Rebuild Cost Assessment.com 76% of UK properties are underinsured and on average are insured for just 63% of their actual rebuild cost.2
Have a new survey completed every few years with a rebuild cost assessment surveyor. Rebuild Cost Assessment can undertake desktop (remote) or in-person, on-site rebuild cost assessments.3
Let’s recap
The “sums insured” is the maximum amount an insurer will pay out for a claim under a specific policy. It represents the total value of the insured property or possessions, such as buildings or contents, as declared by the policyholder. Accurately calculating the sums insured is crucial to avoid underinsurance, which could leave you out of pocket in the event of a claim, or over insurance, which results in unnecessarily high premiums.
For home insurance, sums insured should reflect the cost of rebuilding the property or replacing possessions, not their market value. Regular reviews ensure the sum insured remains adequate.
I have more questions…
For advice on sums insured, underinsurance, or any aspect of your thatched home insurance, please speak to our advisers in the Heritage Team who will be more than happy to make sure that your home has the correct cover in place.
Call: 01823 250780 (new customers)
01823 250702 (existing customers)
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