UK Home Insurance – Policy Types

Buildings Insurance – Definitions

We are using a particular policy from one insurer and you will probably find that the wording and order that your house insurance policy comes in will be a little different. But you should be able to translate this information across to your cover.

These are usually explained quite well although I will comment on who ‘you’ are. That is, who is covered and who is not. This means any member of your family who lives at the address shown in your policy. It includes unmarried partners provided there is clear evidence of a permanent relationship.

There will be a definition about what your building is made of. If yours does not match this, tell your insurer immediately. An example would be if you live in a little country cottage with a thatched roof. Failure to tell your insurers constitutes a ‘non disclosure of material fact’ and could mean that they would refuse to pay a claim.

Your buildings definition also includes all the outside bits and pieces within your property, such as garages walls, footpaths and so on.(How many of us enjoy swimming pools and tennis courts!!) Don’t get this definition confused with the perils you are covered for. That is a common mistake. A definition does not say what you are covered for. It is just a description of your home. The definition also includes any garages on a different site.

Buildings Insurance – Standard Cover

This is where we split up into standard cover and accidental damage (or all risks). If you have standard cover, you need to compare any loss you have with the list of ‘peril’s that you are insured for. If you can’t match the cause of the loss to one of the perils on the list, you are not covered. The ‘onus of proof’ is with you. That means it is you that has to prove the cause of loss is covered.

If you have accidental damage, you then have an ‘all risks’ type of cover. Here you are covered for any and every possible type of loss, except those listed in the exclusions (small print). The ‘onus of proof’ rests with your insurer. That means, they have to prove you are not covered.

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Standard Cover

You should have a list of perils covered with another list of exclusions that apply only to that peril. It might look something like this:
Fire, Lightning, Explosion, Earthquake, Smoke – excludes damage caused gradually
Aircraft and articles dropped from them
Impact by animals, vehicles or falling trees or branches – excludes damage caused by felling or lopping trees
Theft or attempted theft – excludes losses that happen if left unoccupied for more than 30 days or left unfurnished or caused by a tenant or lodger or paying guest.
Malicious Persons – the same exclusions as for theft
Burst Pipes – some exclude frozen pipes, others include it
Storm or Flood – excludes damage by frost and damage by storm to fences, gates and hedges
Riot, Civil Commotion, Strikes, Political or labour disturbances
Oil leakage
Television Aerials, Satellite or radio-receiving aerials, fittings and mast breakage or collapse
Subsidence – a long list of exclusions, see next section !

FIRE – Damage caused by a fire will usually only be paid for where there has been ignition. Where there was also smoke damage to your property from the fire, that is also covered. You cannot claim for the smoke damage to your decorations caused gradually by smoking cigarettes and so on. That is not a fortuitous event, it is something over which you have control. Hence the exclusion. There are some more exceptions to the rule that there must be ignition. you can find out more from the ‘home insurance – grey areas’ page of this site.

LIGHTNING STRIKES – to your buildings are no problem. If it hits an aerial, sorry but that is a contents claim! Although aerials are listed as an insured peril, they do not appear in the definition of a building. They do appear in contents. So damage to aerials constitutes a contents claim. Similarly with explosion and earthquakes. Fortunately these are few and far between here in the UK.

AIRCRAFT – This will cover anything dropped from anything that flies. Again, fortunately, a rare occurrence.

IMPACT – The intention here is that if your home is hit by a car or a wild animal, you are protected. With trees, if you have arranged to have your tree cut down or branches taken off, you need to make sure that all precautions are taken to prevent it hitting your house (or out buildings). Where you have an outside contractor doing this work, and they cause damage to your property, then you have the right to seek payment for the damage from them. But your policy will still exclude this damage so you cannot ask your insurer to help.

THEFT – Cover is very wide, in other words the exclusions do not take much away from you. Where your home is left unoccupied for a long time (e.g. 30 days or more), then cover is restricted as it is seen as a more tempting target for thieves. Indeed, if you home is left unoccupied or unfurnished you should tell your insurer anyway! Similarly with a tenant or lodger. The risk of the tenant or lodge being involved in the crime is such that your insurer does not want to take the risk on, hence the exclusion. And again, if you are doing this, you should tell your insurer.

MALICIOUS PERSONS – In many ways this is the same as for theft.

BURST PIPES – Insurers position on this has gradually changed over the years for the better. A good insurer will pay for any leak, from any pipe, tank or water apparatus, even where it has been leaking over a period of time. Some insurers will also now include damage caused by frozen pipes defrosting. When I first started working in this industry, it was strictly the case that the pipe itself was not covered, only the resulting water damage. Where there is clear evidence that the pipe has failed due to rust then your insurer might still raise this argument. If a pipe is holed by a nail, say when fitting a carpet, then you will need accidental damage cover for the pipe repair but the resultant water damage to your building is paid for under this peril.

STORM OR FLOOD – What constitutes a storm is given in the grey areas page of this site. Frost damage is excluded although damage caused by snow is covered. A common area of disappointment is that damage caused to fences, gates and hedges are not covered. Some fences seem to blow down with even the most mild gust of wind! I have seen at least one insurer offering additional cover, at a premium, for storm damage to these items.

RIOT, CIVIL COMMOTION etc. – Again, it is rare for these to cause damage to your property, but when it does, you are covered. In certain circumstances, your insurers will have a right to recover their outlay from the local police.

LEAKAGE OF OIL – For those with oil fired central heating, any damage to your buildings caused by the oil leaking is covered.

TELEVISION, SATELLITE AERIALS – As indicated above, your buildings are protected if any receiving aerials collapses and cause damage. But the items themselves are defined as contents and thus, not covered by your buildings policy.

SUBSIDENCE – You will need help with this one!

First of all, it is going to cost you. There is a substantial excess, so you will have to pay the first part of any claim. Most policies now impose £1,000 but you can shop around for less. I hope you have some savings put to one side!

Second, your claim will take months, if not years to resolve. But more about the handling of subsidence claims under household claims handling. There is a long list of exclusions. Here is a typical list. If one or more of these apply, you are on your own.

All the outside drives, paths, terraces, walls, gates and so on are not covered unless your main buildings or outbuildings are damaged.
Landslip by coastal erosion
Movement of solid floor slabs unless foundations beneath outside walls also damaged by the same cause
Bedding down of new structures or newly made-up ground settling.
Then there are the extra’s that apply to standard cover. This is where you actually get some accidental damage cover with your standard perils.

Underground service pipes and cables. Apart from wear and tear, you are pretty well covered for any damage you are responsible for as owner of the building.

Glass and sanitary fittings. Again accidental damage to your bathroom fixtures, built in ceramic hobs in your kitchen and all the fixed glass and glazing in your building. Beware, that this is a clause further on into the policy that will restrict what you can claim for. Each item is treated as a separate item, not as part of a suite. Thus, if your wash basin is accidentally damaged, don’t expect your insurer to fork out for a new bathroom suite! This part of the policy might also carry the unoccupancy clause mentioned above.

Alternative Accommodation. Very important if your home is made uninhabitable owing to serious damage. Your insurer will pay for you to be put up elsewhere. This might be a local hotel or the extra cost to family and friends if they can give you a roof over your head. At least one insurer will also pay for your pets to go into boarding kennels if necessary. Cover might also provide for either loss of rent, if you are a landlord, or payment of rent due. There is a limit, a sum insured which is usually 20% of the overall sum insured for your buildings cover.
If you sell your property, the person who buys it can enjoy the benefit of the cover up to the date of completion provided they have no cover of their own.

BASIS OF SETTLEMENT – All good policies will provide for ‘reinstatement’. That is, in effect, ‘new for old’. It will be repaired with new parts and if the whole structure is beyond economical repair, it will re rebuilt with new parts and no contribution from you (except any excess). With some buildings, meeting new regulations might mean increased costs. Not a problem – but it only applies to the damaged part of the building. Demolishing, removing debris, shoring up and so on are all covered as are reasonable architects and surveyors fees, legal fees and fees for estimates, plans and so on.

Buildings Insurance – Other Clauses

SUM INSURED – It is your duty to make sure that the sum insured for your buildings cover is correct. It must be sufficient to pay for the rebuilding cost, not the market value. If is too low, you are ‘under-insured’ and this could mean having to pay part of the claim on top of your excess. In extreme cases, your insurer might even refuse to pay a penny. Once you have established the correct sum insured, and there are leaflets available for your insurer to help you, it will be index linked so should stay correct from then on. Don’t try and save premium by under-insuring your home. You will run in to difficulty with any claim of substance. The saving is not worth it

MATCHING SETS OF SUITES – check your wording carefully. Your insurer will usually try and restrict any repair or replacement to the item damaged only. You could end up with a funny looking bathroom suite! See the home insurance – grey areas page for my thoughts on how far you could push for full replacement of a suite.

LIABILITIES – This area is similar to ‘third party’ cover for your car. It is restricted to any liability you are responsible for as OWNER of the property. The vast majority of incidents involving your property will be brought against you as Occupier and will be dealt with under your contents cover! Thus, I suggest that if someone makes a claim against you, you approach your contents insurers first.

There are a few instances where you could need a buildings liability cover. Examples would include landlords who do not occupy the property, owner/occupiers of flats that share common parts of a building and so on. Actions brought against you under the Defective Premises Act. Cover is included Free with your buildings policy so you have it if you need it.

There is a long list of exclusions which are, by and large, common sense. These include contractual agreements that impose liability on you that you would not normally have, property you own, liability for any employers, damage and injury associated with lifts, if you are running a business and so on. There is usually a limit to the cover, the policy I am looking at is £2 million. Sounds a lot! But some liability claims can exceed that! See also the liability part of the contents cover.

EXTRAS – Some insurers have now bolted on extras such as free legal help lines and emergency assistance services. These can be very useful when you do encounter a problem so are well worth having. Your policy will finish with some general exceptions and conditions. These are much the same as those applying to contents so please check out the contents insurance explained page of this site for more information.

Contents Insurance – Definitions

It is best if you have both contents and building with the same insurer – it reduces conflict! Some insurers will have different views as to what is a content and what is a building! But shop around to get the best deal. It is unlikely you will achieve this with your mortgage provider.

A contents policy will have identical definitions to your buildings for most of the terms listed. Remember these are just definitions. Do not assume that just because your contents policy defines that the word ‘dwelling’ means something built of brick or stone with tiles or slates on the roof that your contents policy covers these things.

Contents Insurance – Standard Cover 

Your basic contents policy will provide for everything within your home whilst it is in your home. It can be extended to provide some cover for certain items taken outside of your home. More about that later. Therefore your contents includes: Household goods and personal effects of every description. That is anything within your home that could conceivably be of a domestic nature and that is not part and parcel of your buildings. Not only your goods and personal effects but anything in your home that you are responsible for. e.g. you are looking after something for a social club you belong to, or your children are looking after some items they’ve brought home from school for the weekend or holiday.

Your contents include your aerials and satellite dishes for your tv and radio. Note that it does not include transmitting aerials for amateur radio. If you are in to this you should ask your insurer to extend the cover.

Telephones are included along with permanently installed domestic appliances (this is where you could have disputes between buildings and contents insurers if wordings vary). All mains supply meters are part of your contents. Exclusions are ‘property more specifically insured’, that means if there was another policy in force that specified the item, you should claim on the other policy.

Then there is the accidental damage cover. This covers you for anything and everything that could possibly happen, unless it is listed in the exclusions. The ‘onus of proof’ is with your insurer. So if they reject your claim, they have to prove that the exclusion applies to your claim. Typical exclusions are:

Contact lenses (insure them via your optician).
Damage which is normal settlement and wear and tear etc.
Rot, mildew, rust, corrosion
Insects woodworm vermin
Dyeing, cleaning, repair or renovation.
Thus if you damage your clothes because the wrong washing machine setting – tough! There is no cover. What is vermin? The policy does not define this. Perhaps it should. Is a red squirrel vermin? Is a grey squirrel vermin? Is a fox vermin or a hedgehog? Where do you draw the line.

Interestingly there was a little press on this subject a couple of years ago. One insurer accepted a claim for impact by a squirrel that had sneaked into their home and knocked over a vase. Another rejected a similar claim on the grounds that they were vermin.

Many policies also exclude damage by domestic pets, but by no means all of them. I suggest that, unless the policy wording you have is crystal clear you should push for settlement. Insurers have to obey what is known as the ‘contra proferatum’ rule. This means that as they worded the policy, they have to accept the consequences if it is not crystal clear.

Contents Insurance – Personal Effects

This is where your policy covers all those personal items you take out and about with you. Your policy will give you a definition of what it covers but essentially, anything you could normally wear or carry when you are outside of your home.

There are exclusions of course. The exclusions will be similar to those that apply to the ‘accidental damage’ part of your contents insurance.

You will find that if you have cover for your personal possessions away from home this duplicates the ‘baggage’ cover provided by travel insurers. A claim on your travel insurance policy will result in them asking about your household contents cover and seeking ‘contribution’ from your household insurers.Your household policy will usually give you a better settlement, especially if it is on a ‘new for old’ basis. In fact you end up paying two premiums for the same cover. The trouble is that nowadays when so much insurance is purchased online there simply isn’t the flexibility to pick and choose which part of the policy you want and which you don’t. My advice is to shop around, you might still find it cheaper to buy your insurances online and to duplicate part of the cover than to go to a high street broker and buy the exact policies that you want.