Is Your Buildings Sum Insured Adequate?
A recent fire at a home in Surrey has highlighted the need to check that your buildings are adequately insured.
Thankfully, nobody was hurt at the fire, at a detached house in Leatherhead.
The incident serves to highlight the fact that homeowners, particularly mid and high net worth individuals, shouldn’t rely on “standard” rebuild figures. In this case, the homeowner had used the (BCIS) Building Cost Information Service (residential building costs calculator) which calculated a figure which, it transpired, was £400,000 short of the true re-instatement cost, leaving the client substantially out of pocket.
The BCIS calculator does point out that there are several categories of properties, including listed buildings, which cannot be worked out online.
Lorna Harrington of BCH, a dedicated provider of buildings insurance valuations says that:
‘The BCIS data provides a system for the valuation of homes for insurance. The dataset is designed around the most frequently seen homes across the country; e.g. two to three storey Victorian terraced homes or homes that were built as part of a large development. Any home that is a complex in design or layout, ‘one off’, unique or includes non-standard materials, is not covered by the BCIS guidance. Special attention also has to paid if the interior of a home has elements of particularly fine quality or has been upgraded. In those situations a specialist reinstatement cost assessment is recommended.’
If your home is listed, old, large , complex or in any way “non standard”, or you are not sure whether it might be, you need to speak to an insurance broker that is familiar with dealing with properties of this type, like Lark. We’re often able to find an insurer who will appoint their own surveyor (or an independent surveyor) to properly calculate the correct buildings sum insured. As a result of obtaining a professional calculation of the rebuild cost, some insurer’s will agree to pay the full cost of repair or rebuild even if this amount is greater than the sum insured shown in your policy schedule. You would need to tell us about any refurbishments or extensions made to the buildings after the valuation was conducted.
The case in question is not a Lark client and is being reviewed by the Financial Ombudsman Service.