Insurance companies and comparison sites spend millions of pounds on marketing building and descriptions insurance, and appear to be hungry for business. Television adverts and billboards are constantly giving the message that comparison sites can save money on home and motor insurance. In reality, insurance companies are quite selective about the risks they will take on, and some people struggle to arrange cover.
Its estimated that there are around eight million homes in the UK which are considered to be â€˜non-standard and may be difficult to insure. In addition to features of your home or property which insurance companies arent keen on, there may be things about you personally which can make it difficult to find insurance. Some insurers have written off specific postcode areas of the UK and wont cover properties within these. Others will offer a policy, but it will come at a high price.
The following factors can make it difficult to arrange a building and descriptions policy in the UK.
1) A property which is unoccupied.
Most insurance policies will only allow cover for a home which is left unoccupied for periods of up to thirty days at a time. If you live abroad for several months a year or spend time at a holiday home on a regular basis, it can be difficult to arrange cover. If you inherit a property from a deceased relative, you may need a more specialist policy while the property is unoccupied.
2) A home in a flood area.
Climate change is thought to be the cause of severe flooding which has devastated parts of the UK in recent years. Due to land shortages, homes are now being built in flood plains and areas at greater risk of flooding. Underwriters are using increasingly sophisticated methods to assess exposure to flooding, and some homes have become un-insurable as a result.
3) A property at risk of subsidence.
Subsidence and ground heave can have a devastating impact on a property, and can lead to very expensive insurance claims. If your home has a history of subsidence or has been underpinned in the past, some underwriters will decline to offer cover. Subsidence insurance claims often take years to settle, and if you have cover in place its generally advisable to stick with the same insurance company while the claim progresses.
4) High value homes.
Most home insurance policies offer building and descriptions cover up to set limits, and you need to look at specialist products if you have needs beyond these. Buildings insurance values should be based on the cost to rebuild a property, not the market value of your home. Contents cover should be based on the cost to replace all of the items in your home, including your clothes, carpets and furniture. If you have valuables such as antiques or works of art, a standard policy may not offer the protection you need.
5) A policyholder with criminal convictions or poor credit history.
Underwriters take account of risk factors relating to the policyholder, as well as the property they are insuring. If you have criminal convictions, CCJs or a history of bankruptcy, you may find it difficult to arrange house insurance. Even motoring and minor offences are taken into account. Some companies are now running credit score checks as part of their underwriting process, and you may find it difficult to arrange a policy if you have a poor score.
6) A policyholder with a history of claims.
If you have made several home insurance claims in a short space of time, you may be regarded as a poor risk by some underwriters. The frequency of claims is taken into account as well as the value of each claim. Its a good idea to avoid making claims for small amounts on this basis, as you can end up paying more for your insurance at renewal. Choosing a higher policy excess may mean that its easier to arrange cover if you have suffered losses and needed to submit claims.
Specialist insurance companies and underwriters will be able to help in the majority of these circumstances. An insurance comparison site may not be able to quote in many of these situations, and its best to contact a traditional broker.
Sam Jones the author of this article was recently looking at ways to reduce his buildings and descriptions insurance and found http://www.uswitch.com/home-insurance/building-and-descriptions-insurance/ website from uSwitch offered a vast amount of useful information.
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