We all know that being a homeowner comes with a lot of responsibilities, from making your mortgage payments, to keeping your property in good repair. However, sometimes when buying a home it’s possible that you might be taking on responsibility for more than you bargained for…
By taking over the deeds to a property you can become legally liable for a number of things, from illegal extensions carried out by previous owners, to paying for repairs to a nearby church!
Building indemnity insurance is designed to offer protection against any costs that you might incur owing to any form of liability (generally a liability that you were unaware of at the time of purchase) that would fall on you as the owner of a property.
Normally, insurance is taken out during the process of a sale as, if either party is concerned about liabilities attached to the property, having a policy put in place can help the transaction to go through. As you’d expect, it is normally the sellers that are expected to pay for the policy, however, there are some mortgage lenders who require that this type of insurance be in place before they’ll allow you to borrow. If you’re buying and you need a mortgage, should the seller refuse to pay for the insurance, you may find yourself forced to fork out for it yourself.
As there are various liabilities you can face as a property owner, some of which are dependent on fairly convoluted laws and regulations, it can be hard to know just how at risk you are of being hit with an unwanted expense. In general, where there is any doubt, your solicitor will advise you take out a policy and, as mentioned above, some lenders will insist on it.
Indemnity policies need to be purchased through a third party such as a solicitor or conveyancer as the companies that underwrite such policies do not deal with the general public owing to the expertise required to fully understand the ins and outs of these products. As the legal issues connected to the liabilities you might want to insure against can be fairly complex, you should make sure the professional representing you makes the important details of the policy as clear as possible.
Unlike other forms of insurance, the cost of indemnity insurance for home owners isn’t calculated according to the level of risk involved (which is usually minimal and, as mentioned previously, sometimes hard to ascertain). Instead, it’s linked to the value of the property in question.
Due to the low risks involved, the premiums you’ll be expected to pay are usually fairly low. You can expect to pay between £50-£500 depending on price of the house and what it is you’re insuring against. Once the insurance has been purchased the property is covered permanently for whoever is living there.
Depending on the type of property in question there are a wide range of liabilities that might be loaded on to you as the owner. Here’s a look at some of the different eventualities that are commonly insured against;
This is one of the most popular forms of indemnity insurance for home owners. It’s used to protect the policy holder from costs and complications that might arise should it come to light that pervious building work done on the property did not have appropriate planning permission from the council, or failed to follow building regulations. This is a risk as, even though you weren’t responsible for the work, the council can still take action against you as the owner of the property.
In some cases, if the council do take action, the remedy will be as simple as applying for planning permission retrospectively. However, you could be forced to remove an offending structure at your own expense, or you may be barred from using the property for a certain purpose. If you fail to carry out work ordered by the council via an enforcement notice you will not only have to pay for the changes (assuming you aren’t insured) you could also be hit with a £25,000 fine. Failure to pay this fine can result in imprisonment.
Whilst this may sound intimidating, bear in mind that it in reality, it’s a fairly rare occurrence that such actions are taken. On top of this, for a single dwelling house, there is a four year time limit after which the council cannot take action (it’s ten years for other types of property.) Nevertheless, if you are worried about a lack of planning permission/building regulations for work carried out on a property, indemnity insurance can provide peace of mind in that, as well as covering the cost of any alterations that have to be made, it will also payout so as to compensate you if the property’s value is lowered as a result.
These policies can be invalidated if incorrect statements about when the work in question was completed are given to the insurer. Likewise, you cannot normally get indemnity insurance if there’s been contact with the council with regards to the building work in question during the three months previous to taking out the policy. If the policy holder brings the insured work to the attention of the council after obtaining a policy, it will also be invalidated. (As a result you can not use this form of insurance as a way of avoiding applying for planning permission if you are planning on carrying out a project yourself.)
If the documents on a house forbid certain alterations which previous owners have carried out regardless, you could be forced to rectify the situation. A restrictive covenants indemnity policy will cover you against liability for the costs of any ensuing legal expenses or additional work that may be ordered by a court should a broken covenant be discovered and enforced on you.
As well as protecting you from the costs you might face in honouring a covenant, your policy will also compensate should your property lose value as a result of changes that have to be made. You can also use such policies for protection if you are self-building on a plot of land which may be subject to covenants which were applied to it as part of a previous sale and could affect your project.
Normally cover will only apply if the covenant was breached at least 12 months before the policy was obtained and was done so without the knowledge of the holder. Disclosing the existence of such a policy to anyone other than mortgage lenders or buyers for your property can also invalidate your insurance.
Again, these policies are purchased through third parties. You should ensure they explain to you fully what covenants might apply or potentially be breached and how this would affect your life in the property. Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from your insurance may be adequate to you. For instance if you have to significantly change your dream home, you may feel you’d have been better of not buying in the first place.
This type of policy insures against the risk that a lack of access rights could affect the way you maintain and use your property. For example, there might be a water pipe running through a neighbouring field for which no easement can be provided.
Your policy will help you pay for legal expenses incurred in obtaining legal access or creating new access. You’ll also get compensation should the changes that have to be made reduce the value of the property.
There’s an archaic law that can end up placing the responsibility for the up keep of a nearby church with the owner of a house. In about 5,000 parishes throughout the UK churches are able to demand money for repairs from the owners of properties built on ex-monastery land, who are, technically speaking, de facto lay rectors.
Though many churches are understandably shy about enforcing this law, which dates back to pre-reformation times, there have been notable casualties. In 2009 a Warwickshire couple were actually forced into selling their farm after it was judged that they were legally responsible for paying a bill for £230,000 worth of repairs to the local church.
It can be hard to find out if this applies to your home or one that you’re thinking of buying, and if it does it can be hard to assess how many people the responsibility is divided amongst. Either way, indemnity insurance can help you to negate this risk by covering you for any costs incurred if the law is enforced on you.
If a property is gifted to a child by a parent who then proceeds to go bankrupt within the next seven years, the property reverts to their estate. If this is a concern for you, you can insure against the risk that you’ll have to pay to protect your interest in the property.
(Note this product is not aimed at those giving property as a gift, or those receiving it as a gift or undervalued, but owners or mortgage payers paying for its full value.)
]]>Homeowners buy home insurance so they can protect themselves against major financial losses if an event were to damage their houses or the contents in the houses.
Buildings insurance provides cover against damage caused to the structure of your house. Whilst not a legal requirement, most mortgage providers will insist that adequate cover is in place before giving you a mortgage.
Buildings insurance covers the permanent structures or fabric of a building. Some policies also cover ‘permanent’ fixtures such as fitted bathrooms, fitted kitchens and built-in wardrobes. Separate outbuildings such as sheds and greenhouses may also be covered but this will vary between providers and individual policies. In addition, some buildings insurance policies may include a level of personal liability cover for injury to individuals sustained while visiting or working at your property. A comparison website can be used to filter individual requirements as well as finding the cheapest deals.
Policies typically cover damage caused by a set list of eventualities. These usually include things such as:
Damage due to regular deterioration or wear and tear is not usually covered and many policies will have other exclusions built in.
Exclusions are specific eventualities that are not covered by the policy. Common exclusions include losses arising from war or acts of terrorism, cold damage to exterior pipes and radioactive contamination from nuclear fuel or waste. Exterior fences and outbuildings are not always covered against storm damage or inclement weather and many policies do not provide cover against damage resulting from DIY.
In addition, many buildings insurance policies will have an excess. This is the amount that you have to pay towards any claim you make. It may be the first £100 of any claim with the exact amount varying between different policies. The amount of excess payable can also vary on the same policy depending on the nature of the claim. A claim for subsidence damage could, for example, carry a steeper excess than a claim for storm damage.
Buildings insurance is usually supposed to cover the costs of completely rebuilding your house. This could be an entirely different figure than the market value of the house. Some insurers offer unlimited cover. This means the full costs of rebuilding your house will be met if the house is effectively destroyed. Others will cover a set amount. This will be based on the type, age and size of the house, as well as its location. The cover will represent an estimate for the costs of rebuilding the house.
This part of a home insurance policy covers the personal property of the people who live in a home, such as clothes, furnishings, appliances, and other personal items. Cars are not included. If a robbery occurs, then this part of the policy will pay for the items stolen.
If a person borrowed money from a lender to purchase a home, the lender requires the homeowner to purchase home insurance to protect the lender’s investment. The home policy coverage must be at least the amount of the mortgage.
Finding a home insurance policy can be as easy as perusing the internet. There are online insurance quote services which compare insurance company rates. Also check consumer guides and with the National Association of Insurance Commissioners (NAIC) for information on various companies. Talk to local agents to find an agent that is comfortable to work with.
Home insurance can provide great peace of mind. However, not all home insurance is straightforward. There are some situations where getting the right insurance is a little trickier than normal.
One of the knock-on effects of the floods that blighted northern England and Wales in September is to highlight the issue of insurance for homes that are designated to be at risk from flooding. The government and the Association of British Insurers are trying to find a workable solution. The ABI wants a legally binding levy placed on all home insurance policies to create a pot from which payment for flood damage will be taken. The government has yet to agree to the suggestion.
In the meantime, insurers who already cover flood-hit properties must continue to offer policies to those homeowners. However, the homeowner is likely to have to pay a high price for coverage. Insurers are not obliged to offer insurance to new customers in at-risk areas. Homeowners in these locations should seek advice from the National Flood Forum or contact a broker that specialises in difficult-to-insure properties.
Typically, the property manager of a building in which several flats are leasehold is responsible for taking out buildings insurance to cover damage to the exterior of the building and grounds. Each individual leaseholder would then take out individual contents insurance for their flat. In some cases the property manager may not have buildings insurance, particularly if he is looking to sell the property. It is dangerous not to have buildings insurance on such a property and the leaseholders may need to purchase a joint policy between the, There are specialist brokers that can arrange this.
Working from home has many benefits. You have the comforts of home without the distractions of an office. It enables you to be flexible, working around children’s schedules, for example. And, of course, the commute is pretty short. However, homeworkers may find that they need to review their home insurance policy to cover what is now their place of work. Most contents insurance polices (those that cover the items in your home against theft and/or damage) only cover you for basic ‘administrative’ items in the home. If you have business equipment you should consider ‘all-risk’ policies that cover loss and damage for such items in the home and if you take them out of the property to work (such as a laptop).
Furthermore, if you have clients visiting your home as part of your work, you may want to investigate public liability insurance, which protects you against any loss or damage arising from clients visiting your property.
Home emergency cover is an insurance policy that protects against emergency situations concerning your home. The most common type of emergency cover people seek is central heating insurance, but you can also find policies that insure against losing your keys or vermin infestation. Such policies can be useful but need to be balanced with the cost of repairs in your area. For instance, the cost of calling out a plumber is much higher in London that in rural areas, so an emergency policy might not be the most cost-efficient for those living in the countryside. There are a lot of levels of emergency cover, so check things like a cap on the number of emergency call-out or premiums dependent on the age of your boiler.
Compared to modern buildings, listed and historical buildings are expensive when it comes to repairs or rebuilding work. Home insurance premiums for such properties reflect this. However, like emergency cover, there are a number of variables when it comes to insurance for listed buildings that homeowners should look into when sourcing a policy. For instance, if the building is part of a group of historical buildings, does it have historical value which rebuilding would compromise, and does it have a commercial function?
Central heating cover and boiler cover are the same thing and they provide protection against exigent circumstances that cause a home central heating system to break down. Heating cover helps to avoid high cost repairs of broken down boiler or central heating systems.
You have two choices how you go about getting cover. Use an online comparison site that compares prices and product features. Or you could simply take a policy on offer from the suppliers listed below, they will also feature on any good comparison site.
The cheapest option may not be the right policy for you, make your decision on what is important in terms of service to avoid disappointment.
Note though, you do not have an obligation to your current gas and electric suppliers to use their heating insurance cover.
Heating cover assures that a qualified engineer will fix whatever problem arises and assures that the entire service is already paid for by your heating cover. Hence parts and labour are covered.
Heating cover also grants peace of mind should your heating system break an awful time like the winter when being without heating and hot water is a dreaded circumstance.
Without heating cover, you risk a long wait for a qualified engineer and will no doubt end up with a much higher bill than the annual cost of a heating cover policy. Hence you have piece of mind on what your costs are.
Two main products are available:
An important step is deciding if you would like full heating system coverage or coverage for just the boiler and the controls. Boiler only products are usually cheaper but offer less cover.
When comparing prices, it is important to check what is covered. Heating cover products vary by price, exclusions and the extent of coverage.
If you aren’t qualified to fix your own heating system, do not attempt to because you could endanger yourself and the life of your heating system. It is better to call someone registered with CORGI.
Purchasing a CO detector will make early detection possible and could save your life.
Heating and boiler insurance is deemed an insurance product and as all insurance policies are regulated by the FSA, your policy is.
Who are the FSA?
The Financial Services Authority is a non-governmental body with statutory powers awarded by the Financial Services and markets Act of 2000. One of their aims is to help ensure retail customers get a fair deal.
When you’re planning that sunny summer holiday, you naturally think to lock up your home to keep your belongings safe. But don’t forget to take care of the possessions in your garden. It’s good news that contents insurance policies can cover the things in your garden too . After all, the last thing you want after a long, well-deserved break is to find your lawnmower, tools and kids’ toys gone from your shed or garage.
Knowing you’re covered by your home insurance policy will help to give you peace of mind. But to avoid having to make a claim on your home insurance, you should do all you can to deter thieves. If you don’t have a policy in place yet, look online to find contents insurance quotes.
Here are six ways to help deter thieves from striking in your garden this summer:
Secure your shed and outbuilding doors with at least one heavy-duty hasp and closed-shackle padlock, or padbolt. You should also check that the hinges are solid, otherwise it won’t be secure, no matter how strong the lock is.
It may not be the first thing you think about, but items in your garden could actually help a burglar to break into your house. If thieves get their hands on a crowbar or hammer they could use them to enter other parts of your home – so lock them away in a sturdy lockable box or cage. Also don’t leave ladders lying around as they could help them gain access to the top floors of your house.
You can buy alarm systems specifically for garages and sheds – these can either run off a battery or your mains power supply.
The sight of CCTV on the side of your house, overlooking your garden, could be just what you need to put off thieves. And if you do become the victim of crime, the video footage could be used as evidence to show the police.
Garden lights that detect movement can be a good way to deter a burglar. Install them around the outside of your house and near outbuildings.
Some gardens have expensive items, like statues, large plants or water features. If they can’t be stored away, you might like to consider something more permanent like setting them in concrete or using land anchors.
Taking precautionary steps like these could really help to make your garden that little bit more secure. But with the best will in the world, thieves can still strike, so make sure you’re covered with adequate contents and buildings insurance.
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