Listed buildings are works of art. Yet many home owners, brokers and insurance companies are unaware of the complexities involved in insuring them properly. There are nearly 500,000 listed buildings in England and their owners have a great responsibility to preserve and protect them for future generations. In fact, the consequences of knowingly under-insuring a listed building could involve legal action.
So how can you ensure that your listed building is properly valued
and protected? A standard “off-the-shelf” insurance
policy may not be suitable for a period home - it's worth upgrading
to a specialist policy. As well as the extra peace of mind, this
could save you money both on premiums and on claims settlement.
La Playa's specialist policies provide cover for “All Risks”
including accidental damage, and we can advise on:
Reinstatement Value
It's very important to get the right advice when assessing the reinstatement cost of your property (ie: how much it would cost to re-build), as under-insurance can lead to reduced claims settlements. Often we discover that larger properties are insured for their market value and not the reinstatement cost (a re-build following a fire, for example). This is particularly a problem with listed and period buildings, as the reinstatement costs may be much higher.
For a listed building, it's important to determine which are the most important features of the building. In the event of a catastrophe, English/Scottish Heritage notes that generally full reinstatement will be required if more than 40% of the historic fabric has survived. However, one should beware of taking this guidance too literally: nearly all of a building may be destroyed, but the remainder could still be the most important part of the building and the entire reason for the listing.
Trace and Access Cover
A burst pipe can be a nightmare - your possessions damaged, your décor ruined, and all the hassle of an insurance claim to handle. And even then you could end up out of pocket! Most household insurance policies will cover you for the damage caused by a burst pipe. BUT what if the pipe is inaccessible? What if it's within the walls or casing, part of the fabric of your house? The plumber may need to smash through to reach the damaged pipe, and may even make several attempts to trace the pipe before identifying its exact location. Who'll pay for this damage?
Specialist policies include cover for “Trace and Access”. We recommend policies like Hiscox's “606”, Chubb's Masterpiece and products from Zurich and AIG, which provide this cover automatically. Period properties are more susceptible to leaks, and the cost of replacement/repair in the original style is more expensive than for modern homes. “Trace and Access” is especially important if you have under-floor heating: the area that may need to be damaged to trace the leak could be large, and could be an expensive slate or wooden floor.
Case study
In a recent case reported by Chubb claims department, a householder had a leaking shower (a very common problem) causing damage to the grouting and the plasterboard behind it. In order to access the faulty pipe, plumbers had to break through hand-painted tiles and marble which had not otherwise been damaged by the leak. A standard home policy would only cover the damage caused by the leak itself, but this householder's “Trace and Access” clause took care of the secondary damage worth hundreds of pounds.
Subsidence and Flood
- Insuring properties that have previously suffered from subsidence and have subsequently been underpinned is virtually impossible
- 2 million properties in England and Wales are in flood risk areas
If your home has a history of underpinning or flooding, don't despair: our colleagues at Bureau Insurance Services can handle underpinned property. Contact them on 01424 220110. If your home has a history of underpinning or flooding, don't despair: unlike many insurers, who write off these properties just by looking at the postcode, they will consider each property on an individual basis.
Valuation
Proper valuation is essential. Specialist chartered quantity surveyors, architects and insurers can provide advice. The term “specialist” is crucial since the inexperienced valuer may not understand the complexities involved in valuing an historic listed building.
Specialist insurers
Many insurance companies and surveyors determine the rebuilding cost of a structure by quickly noting the exterior construction. This is not acceptable for a listed building. From the outside, a building may appear to have been built in the late eighteenth century, but the inner timber structure may date to the fifteenth century. And special features are frequently hidden inside, often requiring the skills of specialist craftsmen to restore after damage. Click here to find out why it pays to opt for a specialist policy.
Risk management
Good risk management is vital. Listed buildings are particularly susceptible to fire and theft, but steps can be taken to reduce these risks. Since faulty electrical wiring and appliances cause most fires, an inspection by a suitably qualified registered electrician on a five yearly basis is recommended. Security measures should be taken to dissuade forced entry, which often leads to arson. However, all loss control provisions must be carefully designed so as not to compromise or damage the historic fabric or integrity of the building.
Documentation
If the owners and insurance companies make the effort to document a listed building and determine an accurate rebuilding cost, the resolution of a claim and the rebuilding process will be made far easier for both parties. It is highly recommended that a listed building owner should become involved with the collection of data.
Period Property Conversions
Click here for advice on insurance for large historic buildings that have been converted into apartments.
Insuring during repairs/renovation
Your standard home policy probably doesn't cover you for major renovation projects - click here for advice.
Q&A on insuring period property
Click here for queries on subsidence, unusual construction and security issues.
Proper planning today by owners and insurance companies will ensure the survival of period and listed buildings tomorrow.
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