Mid and high value home insurance

If you own a mid or high value home, a listed property or a house that has been designed and built using methods other than traditional standard construction, you may find it difficult to obtain insurance that fully meets your requirements, or pay a much higher premium to do so.

This is because the majority of “of-the-shelf” insurance policies that we see so heavily advertised on television and on comparison sites are designed to meet mass market criteria that ticks all the boxes. Anything outside of this, and we are often faced with a “computer says no” response and lack of understanding.

In this situation, specialist advice should be sought from an insurance professional, specifically an insurance broker, who understands the unique requirements of such a homeowner and has access to specialist insurers who can provide the right cover and protection at a sensible premium. This sector is often referred to as High Net Worth Insurance or Private Client Insurance.

The Cover

It is often underestimated the time it can take for a property to be fully reinstated following a significant event such as fire or flood. Specifically in relation to listed buildings, aside from having to often source materials in keeping with the original construction and using the original methods of labour, before any work is even undertaken, listed building consent is required to sign off the proposed work, and all of this can be a very lengthy process. If your home is uninhabitable following the damage, it is important that your insurance will adequately cover you to live in alternative accommodation throughout this process, which can unfortunately sometimes be a number of years. Some of the mass market insurers will only limit this for a short amount of time, or to a limited monetary value which, if exhausted, will mean this will then be a cost to be borne by you. Most specialist high value home insurers will provide cover up to 5 years which is much wider than the standard market.

Within the home, too, a specialist high value home insurer will offer much wider limits on items such as fine art, antiques, collectables, silver, jewellery and watches, with items not needing to be individually listed until they exceed at least £10,000 per single article, which is much wider than the standard market. It is important to be aware of any single article limits within any contents insurance policy to ensure that, in the unfortunate event of a claim, one is fully reimbursed and not restricted to an insurer’s inner limit or maximum amount payable. Some mass market insurers will only pay up to a fixed amount for valuables so again, please ensure your cover adequately reflects your own personal circumstances.

Cover for contents from a Private Client insurer is offered on “all risks worldwide” basis, so your contents are covered worldwide, for all eventualities unless specifically excluded (such as wear and tear or gradually operating causes). This gives enormous peace of mind, for example, that if holidaying abroad, and you lose a diamond from a ring, this is covered as standard.

Sums Insured

A report by Barrett Corp Harrington, the UK’s leading dedicated provider of buildings insurance valuations, stated that 77% of UK properties were under-insured, on average by 45%, which is a frightening statistic. In the event of significant damage to your home, if this is correct, one could be faced with the proposition of simply running out of funds to reinstate the property, or being subject to an insurer’s under-insurance condition. This states that if underinsurance exists, any claim settlement will be subject to a deduction depending on the level of underinsurance. By way of a simple example, if a property is under-insured by 50%, and a claim is made for £100,000, the insurer is only liable for 50% of the cost, settling the claim at £50,000, leaving the policyholder with a shortfall of £50,000.

Many specialist high value home insurers will offer a free buildings appraisal whereby they will appoint a surveyor, at a cost to the insurer, to either visit the property or conduct a desktop survey remotely, to ascertain the correct rebuild vale of a property and thus eliminate the issue of underinsurance.

Portfolio Insurance

In addition to covering your main UK home, these specialist insurers will also provide cover for second homes and holiday homes, both in the UK and overseas. Again, cover is generally broader than that provided by the standard market and will extend to include perils such as accidental damage and damage by tenants, which is often a typical exclusion with other insurers. For many people with a second, or even third home, who split their time fairly evenly between properties, why should they have to accept reduced cover at one of their properties just because an insurer doesn’t deem it to be their “main” residence? A specialist insurer will consider this and the same high levels of cover will apply at each property.

Private Client Insurance Market

The vast majority of these specialist insurance policies can only be obtained through an insurance broker, and the insurers will not sell their policies directly to the general public. This is because insurers recognise the advice that a broker gives to their clients to ensure a bespoke policy is provided to match each individual’s requirements, rather than adopting a one size fits all approach. One homeowner’s requirements may differ greatly from the next, so it is the insurance broker’s job to ensure the right policy is provided to that individual. The importance of getting this right cannot be underestimated. Ultimately we all hope that we never need to call upon insurance as it means we have suffered some form of loss or damage. However, we should expect that if we do need to make a claim that we will be paid quickly, and in full. Get the right cover in place from the outset, and benefit from peace of mind knowing that should the worst happen, you do not experience any shocks or unexpected surprises in the unfortunate event that you need to make a claim.

Alastair James Insurance Brokers Limited are an independent insurance broker based in Cheltenham, who specialise in selected classes of commercial and personal insurance, the primary focus of which is high value homes and contents. They have a panel of specialist high value home insurers and provide a personal service enabling them to achieve the right balance between a comprehensive policy and a competitive premium.

Telephone – 01242 371 058 Email – admin@ajamesinsurance.co.uk www.ajamesinsurance.co.uk