Introduction
Buildings insurance policies differ in the cover they provide and in their terms and conditions. The information here is of a general nature - for detailed information you must read your policy.
Property Covered
In addition to the structure, a buildings policy covers permanent fixtures and fittings such as baths and toilets, fitted kitchens and bedroom cupboards. Interior decorations are also covered. Policies usually extend to include outbuildings such as garages, greenhouses and garden sheds. Boundary walls, fences, gates, paths, drives and swimming pools may not be covered - you need to check the policy if you need cover for these areas.
Against What Risks?
Most policies cover damage to your home by:
| Fire | Aircraft or things falling from them |
| Lightning | Subsidence, heave and landslip |
| Explosion | Falling trees or branches |
| Earthquake | Impact by vehicles or animals |
| Theft | Breakage or collapse of aerials |
| Riot and malicious persons | Escape of water from tanks or pipes |
| Storm & Flood | Escape of oil from fixed heating installations |
Extensions Of Cover
Most buildings policies have valuable extensions of cover.
- Alternative Accommodation - If your home is so badly damaged that you cannot live in it until repairs are done, your policy will help to meet the reasonable cost of alternative accommodation up to a stated limit.
- Liability - If, as owner of your home you are responsible for any injury to someone or for damage to their property your policy will pay the damages and cost for which you are legally liable. There is usually an upper limit of £1 million or more. However, your main legal liability arises from you being occupier of your home and a contents policy covers this.
- Underground Pipes and Cables - supplying gas, electricity, oil or water, as well as sewage pipes, are insured against accidental damage. They are not insured against wear and tear.
- Glass - In doors, windows and skylights is covered against breakage together with baths, washbasins and WCs.
Exclusions
There are limits and exclusions to every policy so be sure you have read it. It is a legal contract and if there is anything you do not understand ask for an explanation.
One word you will come across is "excess". An excess is an amount of money you have to pay towards the cost of each claim. Excesses vary in amount. They may apply only to certain types of claim or they may apply to all claims. Your policy will tell you. One excess that appears in almost all policies applies to damage caused by subsidence, heave or landslip. This is usually a specific amount (for example £1,000). Common exclusions are war risks, damage caused by storm or flood to gates or fences, frost, sonic bangs and radioactive contamination from nuclear fuel or nuclear waste.
Sum Insured
The sum insured is the amount of money for which your home is covered. It is the most your insurers will pay under any circumstances. You must calculate an adequate sum insured to avoid claim payments being reduced because of under insurance.
Regular checks should be made to ensure it remains correct. It is your responsibility to get the sum insured right.
The sum insured under a buildings policy must be the full rebuilding cost of the home. The market value of your home or the Council Tax band valuation have no direct relationship to the rebuilding cost of your home.
You can instruct a member of the Royal Institution
of Chartered Surveyors to prepare a professional Rebuilding Cost Assessment for insurance purposes. This will normally be carried out by taking detailed measurements of the house and using the Guide to House Rebuilding Costs mentioned in the section 'Working Out Your Sum Insured'. However, (as mentioned in the section headed 'Tables'), this may not be appropriate in certain circumstances where the method of Rebuilding Cost Assessment will need to be specially agreed.
This information sheet gives you advice on how to work out the rebuilding cost for a standard building.
Index Linking
You must make sure that the sum insured is kept up to date to allow for changing rebuilding costs. Many insurers help by "index linking" your policy. This simply means that your sum insured is altered automatically whenever there is a change in the rebuilding cost. Usually there is no charge for any increase between renewal dates. Index linking can work properly only if your sum insured is right to start with. Then make sure you keep it up to date by telling your insurance company if you improve your home - perhaps by installing central heating or building an extension. Do not rely on index linking alone to keep your sum insured up to date. Review your cover every few years.
Emergency Repairs
If your property is damaged, do what you can to stop the damage getting worse. Many policies cover the cost of temporary work.
Some insurers provide emergency "helplines" which will help you to find a competent tradesman who can carry out emergency repair work.
Prevention
Your insurance policy can help put things right, but cannot compensate for the upset and inconvenience. Take all the precautions you can to prevent the worst from happening.
It has been found, in particular, that tree roots can cause damage to your own or your neighbour's property. It is important to take professional advice before planting or felling trees.
Working Out Your Sum Insured
The tables on the back page give general information on rebuilding costs. They are based on the much more detailed 'Guide to House Rebuilding Costs' published by the Building Cost Information Service of the Royal Institution of Chartered Surveyors. You will see that one table shows a per-square foot rebuilding cost for a variety of types of property. The other table gives the costs on a metric basis. The rebuilding cost of even similar houses can vary depending on individual circumstances. Find out the external floor area of your home - both upstairs and downstairs. The best way is to go outside and measure the length and width of your home and multiply these figures together. If you cannot measure outside, measure inside and add the thickness of the walls. You can measure either in feet or metres.
Whilst an integral garage would be included in this calculation, if the garage is separate or built on the side of the house, an appropriate amount will need to be added to the rebuilding cost of the house. To take account of fences, gates, walls, patios, paths, drives and swimming pools, an appropriate amount should also be added to this figure.
You now know the ground floor area. For upstairs, you may be able simply to double the ground floor area. If the other floor area is a different size then calculate the upstairs area separately and add the figures together. For three storey houses, only 70% of the floor area of the third storey need be included. A third storey of a house does not mean the attic in a two storey house, unless the roof space has been converted into a third storey. Write the answer against A in the table overleaf.
Identify your type of home in the appropriate table. Then, having established your region, work along the line until you reach the right age bracket. Finally, according to whether your home is small, medium or large (based for three storey houses on the area of the first two floors) choose the appropriate figure per-square foot or metre. Put this figure against B and complete the calculation.
Tables (see below)
These tables give rebuilding cost information for five different house types, related to ages, sizes and locations of houses. They are unsuitable for certain types of houses:
- Houses built of stone or materials other than brick.
- Houses with more than three storeys, or basements and cellars.
- Flats, because types of construction differ widely, as do responsibilities for shared parts.
- Houses with special design features or of greater size than those described in the tables.
- Houses containing hazardous materials e.g. asbestos, likely to require special precaution/treatment following damage or demolition.
- Houses which are considered to be historic or are listed buildings, which will almost certainly have to be rebuilt to their original design using identical materials.
Flats and Maisonettes
It is recommended that a flat or maisonette is insured together with the other flats or maisonettes that make up the block, under a single policy arranged for the whole block. This will avoid complications which may arise if units are insured individually and also ensure that you have the widest possible cover available, e.g. for common parts, which may not be available under an individual policy.
To calculate the rebuilding cost for any of the above categories, seek professional advice: do not rely on these tables.
The rebuilding costs in the tables provide for an average home to be rebuilt to its existing standard using modern materials and techniques and in accordance with current Building Regulations and other statutory requirements.
Where it is necessary for your home to be rebuilt exactly in its original style to comply with local authority requirements, you must allow for the additional costs and a professional Rebuilding Cost Assessment is essential.
The rebuilding costs also include an allowance for full central heating costs (approximately £3,750), demolition and site clearance costs, Architects' and Surveyors' fees, and one half of the cost of rebuilding party walls in both terraced and semi-detatched houses.
Figures in the tables are based on houses of an average quality finish and might need adjusting. The figures given are in respect of double glazing. If your house is of higher quality with, for example, a luxury kitchen and sanitary fittings, floor and wall finishes, your final figure may need to be increased by up to 25%.
Where a fire and/or intruder alarm system is fitted, replacement costs should be taken into account when calculating your sum insured.
For garages (other than integral), rebuilding costs range between £3,850 for a single pre-fabricated garage to £6,950 for a double pre-fabricated garage. Costs for a purpose built garage range between £11,000 for a single to £14,800 for a double built garage. Using this information as a guide, insert an appropriate figure against D.
Rebuilding cost tables and data Copyright BCIS (Building Cost Information Service) 2004. www.bcis.co.uk
This figure is the approximate amount for which an average quality home should be insured.
Regions
(Click here to view the definitions of regions.)
1 London and Channel Islands*;
2 South East and East of England**
3 North West, South West and West Midlands;
4 East Midlands, Wales, Yorkshire, Humerside, the North East, Scotland and Nothern Ireland***
* Building costs in the Channel Islands tend to be as high as those in London Boroughs but they are affected by particular local conditions.
** Building costs in Norfolk and Suffolk should be reduced by 7% against the figure produced by the calculator.
*** Building costs in Northern Ireland are considerably lower than in the rest of the UK and may be 20% below the costs given for Region 4.
The regional groups are based on broad cost bands. However, local variations are caused by a number of factors including competition between builders and the ease of rebuilding.
You should seek local advice if your home is in the Channel Islands or Northern Ireland.
Rebuilding Cost Tables:
Table 1: £ per square foot (PDF: 9Kb)
Table 2: £ per square metre (PDF: 9Kb)
Further Information
If you need further advice, your building society, insurance company,
broker or insurance adviser will be pleased to help.
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