Did you know that around 14% of UK properties are overinsured? Even more surprisingly, nearly 80% are underinsured! Why do so many property owners get it wrong? When it comes to the level of cover in your building insurance policy, the devil is in the details, which can be complex! We're here to break down those details and make finding the perfect level of cover simpler.
Why Is It Important to Get The Right Level of Cover?
Getting the right level of cover for your buildings and contents insurance is essential to avoid nasty surprises when making a claim. Imagine finding out that your policy doesn’t fully cover the cost of repairs when you need it most! That’s why it's important to figure out the actual level of cover you need, including the full cost of rebuilding or repairing your home in a worst-case scenario. If you underinsure your property, you might not get enough money to replace or rebuild it if disaster strikes, leaving you to pay the rest out of pocket.
Don't Forget: Regularly reviewing and updating your policy is essential, as circumstances change over time. A rebuild cost assessment (also known as a reinstatement cost assessment) ensures your policy reflects your home's current rebuild cost. Avoid being underinsured, as insurers may apply the average clause when calculating payouts.
Key Insurance Terms You Need to Know
Before getting into the complexities of buildings insurance coverage, you need to be sure you’ve got an understanding of some of the key insurance terms:
Sum Insured: The sum insured, or ‘insured value,’ is the maximum your policy will pay out in a claim. It should reflect the full cost to rebuild your home, including materials, labour, and other fees. Getting this figure right avoids underinsurance.
Wear and Tear: This refers to the natural deterioration of materials and structures over time due to use and ageing. Most policies don’t cover wear and tear, so maintaining your home in good condition is really important.
Subsidence: Subsidence occurs when the ground beneath a property shifts, causing structural damage. It is often caused by clay soil and tree roots.
Trace and Access: A water leak from a burst pipe can be expensive, and you can’t waste time wondering if your insurer is going to cover the cost of hiring a plumber to find it! With trace and access coverage, you can get someone out ASAP, knowing you’ll be covered for the cost of finding the source of the problem. (Keep in mind that the cost of repairs is not covered by the trace and access cover.)
Escape of Water: This term addresses damage from sudden water leaks, which can occur due to burst pipes. Most buildings insurance covers the escape of water, but act quickly to minimise damage and ensure a successful claim.
Structural Movement: This includes movement in your home’s structure, like settlement and heave, which can lead to cracks. Understand how your policy covers structural movement, as this can vary.
Good Condition: Keeping your property in good condition means maintaining it to prevent avoidable damage. Claims can be denied if damage results from neglect, so maintaining your home is crucial.
Knowing these terms helps you better understand your buildings insurance policy (including the fine print!) and choose the right level of cover for your property.
Specific Coverage Areas to Be Aware Of
What is covered by buildings insurance? Great question! But the answer really depends on your insurer and the type of cover you have. Here are some of the major areas of coverage you should consider when shopping for a policy:
Basic Coverage: Your basic level of cover with a building insurance policy will protect the structural elements of your home, including walls, roofs (including roof tiles), foundations, and even plumbing. It may also cover both barrier and garden fences, and any other outdoor areas that fall within your property.
Comprehensive Coverage: A combined or ‘comprehensive’ insurance policy will generally cover both the structure of your home and the possessions within it, including electronics, clothing, furniture, carpets, laminate flooring, and more. (Understand and compare different policy types by reading our How to Compare Building Insurance blog.)
Subsidence: Does building insurance cover subsidence? It’s a worry for many homeowners. Rest assured, most buildings insurance policies will cover damage caused by subsidence, but will often incur an additional excess, so it’s important to check with your insurer about this.
Building Work: Building work is usually covered by your buildings insurance so long as your builder is properly certified. But once again, check this with your insurer before beginning any work on your property.
Always Ask: If we could give you one piece of advice about level of cover, it’s this – always ask! Whether you’re worried about water damage to carpets from a burst pipe, or structural movement due to subsidence, always check with your insurer about what exactly your policy covers.
We know it sounds daunting, but don’t worry – getting the right level of cover is just a matter of knowing what needs protecting in and around your home, and as always, shopping around for the best policy to suit your needs.
The Insurance Claims Process – Simplified
Filing an insurance claim can seem a bit overwhelming, so use this simple guide to make things easier, and take things step by step:
Act Quickly: As soon as you notice damage, such as a burst pipe or storm damage, take immediate action to minimise further damage. For instance, shut off the water supply if a leak occurs and document the damage with photos or videos.
Contact Your Insurer: Notify your insurance company as soon as possible. Most insurers have a 24-hour helpline for emergencies. Provide them with details about the incident, including what happened and the extent of the damage.
Gather Documentation: Collect all necessary documentation to support your claim. This includes receipts, repair estimates, and any correspondence related to the incident. Accurate records help facilitate a smoother claims process.
Assessment and Repair: Your insurer may send a loss adjuster to assess the damage. They’ll evaluate the cost of repairs and ensure it aligns with your policy coverage. Once approved, arrange for repairs to be carried out promptly.
Follow Up: Keep in contact with your insurer throughout the process to ensure your claim is processed efficiently. If additional information is required, provide it promptly to avoid delays.
Get The Right Level of Cover Today
Understanding the level of cover in your building's insurance policy is so important for protecting your property and ensuring your family's financial security. Regularly reviewing and updating your policy helps you avoid potential pitfalls and ensures comprehensive coverage, so don’t just ‘set and forget’ it.
Trust RebuildCostASSESSMENT.com to get you the most accurate assessment of your rebuild cost, and be sure you’ve got the right level of cover for your home. Get in touch today to get started, and don’t forget to join our newsletter for all the latest updates!
Important disclaimer: The information provided here is for general informational purposes only and is not intended as professional advice. While we strive to ensure all information is accurate and up-to-date, the content may not reflect the most current legal or regulatory developments, standards, or practices. No representations or warranties are made (express or implied) about the accuracy of the information provided, and reliance on this information is strictly at your own risk.
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