Being sure about insurance

Insurance broker Lycetts looks at the key insurance questions all prospective purchasers should be asking before buying a HNW property.

For potential buyers of HNW properties, appearances tend not to be deceptive. That Georgian former rectory, or that charming 200-year-old cottage in the New Forest are not going to suddenly change once the purchase is complete.

However, there are often a number of significant insurance implications for such properties and it is important that would-be buyers consider them before any contracts are signed.

How does listed building status affect insurance?

When insuring homes that are listed buildings, most providers work out home insurance based on the rebuild value. It is advisable to ask your surveyor to provide you with a purchase price and a rebuild price at the outset, as they may be significantly different. As rebuilds for such properties can often involve costlier and specialist materials, contractors and building techniques, then insurance would inevitably involve higher premiums.

Will builds require additional insurance?

Most household policies can accommodate a small amount of building works – around the £50k mark – but works that exceed your policy limits could potentially compromise your insurance policy, so do check with your insurer. Depending on the builder’s contract, cost and complexity of the project, the builder’s insurance in some cases will cover the works. For better protection, a standalone contract works policy could be considered.

Should you be planning any building work that affects party walls, party structures or boundary walls, or that involves excavations near neighbouring buildings, then, under the Party Wall Act, specialist cover must be obtained.

What about flood risk?

Properties close to rivers, lakes and the seashore are highly desirable for many but in areas that are considered a flood risk there is usually a price to be paid.

Flood cover is a standard feature of home insurance. However, if a property is in a high-risk flood area, or has suffered flooding previously, there may be a high excess. Some policies may exclude flood damage for properties in such vulnerable areas, so it is important to read the small print.