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Holiday Homes – Getting your Buildings Insurance Right

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Avoiding underinsurance for holiday home owners

As holiday home insurance specialists we understand the industry and know the insurance needs and demands of letting a holiday property; that’s what comes with using a specialist. Please take a minute to read Holiday Homes – Getting your Buildings Insurance Right and give us a call if you have any questions.

We’re here to give you the peace of mind that should the worst happen you’ll be covered and supported. In order to do that we want to make sure that you have the right cover in place. One aspect of your insurance cover you should be checking is that your building sums insured are correct. It’s important that you make a Fair Presentation Of Risk which includes providing the correct sums insured.

The risks of underinsurance

The buildings sum insured is the maximum amount your insurer will pay out if you make a claim.

For this reason it’s vital to get it right and ensure it’s sufficient. It must represent the cost of rebuilding, repairing or even replacing your property should the worst happen.

If you’re underinsured you bear the risk that you may have to fund a proportion of the cost from your own pocket. This can be potentially crippling to your own finances or that of your holiday business.

The cost of rebuilding and not the value of your property

A common misconception is often that your sum insured should represent the market value of your property. For insurance purposes your sum insured should actually reflect the cost of rebuilding your property.

This can be a tricky figure for holiday home owners to calculate so please do take time to consider what that figure should be.

You’ll need to think about:

  • The building cost of reinstating your property; this can include items such as swimming pools, paths, drives, patios and other things that you might not think about such as satellite dishes or fences and hedges.
  • The cost of replacing fixtures and fittings, for example do you have built in wardrobes, specialist light fittings or bedroom furniture that would cost significant sums to replace or restore?
  • Will debris need to be removed from the site and what implication will this have on the cost of restoring your property?
  • What will the cost be of complying with EU legislation Local Authority Buildings Regulations or other statutory requirements?
  • Professional fees; to get your property back to where it was before the incident you’ll likely need to consult with engineers, architects and surveyors.  Their fees will need to be included in your calculations.

Index Linking – make sure the initial figure is correct

Your buildings sum insured is index-linked, which means that it adjusts according to inflation. This ensures your sum insured is increased in line with any changes in the cost of rebuilding your property.

Despite this index linking it of course remains vital that the sum insured was correct in the first place.

Have you made improvements? Let us know

As you make improvements to your holiday home make sure your sums insured represent the increased cost of replacement and don’t wait for your insurance renewal to make the increases.

For example, if you add a hot tub to the garden or update the interior of the property contact your insurer to let them know and make sure they’re covered from day one.

Calculating the cost of rebuilding your property 

Three methods you can use to calculate the cost of rebuilding your home, holiday home or buy-to-let property. Please use one of these to ensure you are Getting your Buildings Insurance right.

  1. ABI Rebuilding Cost Calculator

If your holiday home falls within a range of standard house types the Association of British Insurers offers a rebuilding cost calculator (http://abi.bcis.co.uk/), which will help you to assess the level of insurance you need.

This is however no substitute to instructing a professional Surveyor to prepare a Rebuilding Cost Assessment for insurance purposes. Although there is a cost for these surveys they’ll make sure you have the right level of cover.

2. Desk Top Rebuilding Cost Assessment 

Getting someone to visit your property to carry out a professional assessment can be time-consuming and expensive. However thanks to our partnership with Rebuild Cost Assessment Ltd we can offer you a reliable low-cost service; from a `Regulated by RICS (Royal Institute Of Chartered Surveyors) organisation.

You’ll receive a comprehensive Rebuild Cost Assessment (RCA) report guiding you on how much you should insure your buildings for. This is a fantastic and affordable online service which can protect you, your home, holiday home or buy-to-let property from the potentially severe consequences of under-insurance.

Rebuild Cost Assessment Prices Start from as low as £193.50.

However we have negotiated a SPECIAL DISCOUNT of £20.00 with www.RebuildCostAssessment.com on your behalf. Simply enter the code BOSHERS20 when placing an order online to get your discount. Use the appropriate link below to order your assessment and once receive please forward a copy to your insurance adviser at Boshers.

Nb. Boshers Ltd have no commercial interest in Rebuild Cost Assessment Ltd and we do not receive any financial benefit for the referrals. We have negotiated the discount as we believe this service is a cost effective way to help our clients obtain accurate costs for rebuilding their properties.

3. Instruct a RICS qualified Chartered Surveyor to visit your property and carry out a rebuilding cost survey.

To search for a chartered surveyor in your area please click here: http://www.ricsfirms.com/

What should you do now?

If you need to adjust your insurance cover once you have reviewed your sums insured please contact us. You can call our team on 01237 429444 Monday to Friday.

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Holiday Home Insurance | A guide to calculating your Sums Insured

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holiday home gutted by fire

Holiday Home Insurance specialists, Boshers Ltd advise furnished holiday let owners to review their cover and in particular to check that sums insured are correct.

Mark Lavington, Director of Boshers Ltd said that, “many holiday home owners will find that their holiday home insurance falls due for renewal during the Spring and early Summer as this is often when properties were purchased or began their life as furnished holiday lets.

This is therefore a poignant time to ensure that you have sufficient cover and especially that your sums insured are correct, as underinsurance can cause holiday home owners major financial issues”.

Please read Holiday Home Insurance | A guide to calculating your Sums Insured for more information.

Should you require any additional guidance, a holiday home insurance quote or a revised quote to increase your sums insured, please contact a member of Boshers Holiday Home Insurance Team on 01237 429444 or visit http://www.holidayhomeinsurancequote.co.uk/ 

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Holiday Home Insurance – Are you fully covered?

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Holiday home insurance specialists, Boshers Ltd advise furnished holiday let owners to review their cover and in particular to check that sums insured are correct. Mark Lavington, Director of Boshers Ltd said that, “many holiday home owners will find that their holiday home insurance falls due for renewal during the Spring and early Summer as this is often when properties were purchased or began their life as furnished holiday lets. This is therefore a poignant time to ensure that you have sufficient cover”.

Suitable holiday home insurance will give you peace of mind should the worst happen, however you’ll need to ensure the correct buildings and contents sum insured are specified to ensure the right amount of cover is provided as the implications of underinsurance can be costly.

Holiday Home Insurance. Are you fully covered?

Underinsurance

It is important not to underinsure your holiday home property or its contents. This is because if you only insure for say, 50% of the reinstatement value of your property or contents you stand to have any claim payment reduced by half and you will be considered as your own insurer for the difference and thus bear a rateable proportion of the loss accordingly. The guidance below will help you calculate the correct figures and avoid the potential for underinsurance.

Rebuilding Costs

Your holiday home buildings sum insured should represent the amount that you would have to pay to rebuild your holiday home again should there be a total loss e.g. in the event of a fire. This should include the cost of rebuilding boundary walls or fences, reinstating driveways and outbuildings. Internally you will need to consider fixtures and fittings such as built in bedroom furniture, kitchens and bathrooms as well as redecoration, basically everything that is fixed and would be left behind if you sold the property.

The Association of British Insurers’ (ABI) rebuilding cost calculator is designed to help you assess the rebuilding cost of your property, if it falls within a range of standard house types. There is of course no substitute for instructing a professional Surveyor to prepare a Rebuilding Cost Assessment for insurance purposes. The RICS web site can be used to search for a Chartered Surveyor (http://www.ricsfirms.com/) in your area.

Index linking

Because your holiday home insurance buildings sum insured is index-linked (i.e. it’s adjusted according to inflation), if the worst happens and the sum insure is sufficient your claim will be paid in full up to the sum insured. It is none the less, important that the sum insured as well as being correct at outset, is also increased to reflect improvements that you make to your holiday home, such as adding an extension, conservatory or a designer kitchen or bathroom.

Contents Calculator

Your holiday home contents sum insured is the total value of replacing your holiday home contents with new items, should there be a total loss e.g. in the event of a fire. It’s important that your sum insured is correct so that your insurer can quickly pay any insurance claims you make.

The most effective way of working out your contents sum insured is to draw up an inventory of all the contents in your holiday home, room by room. Against each item write the replacement cost for a similar brand new item. The contents of your holiday home includes everything that isn’t fixed, which you would take with you if you sold and interestingly also includes carpets, so ensure that you allow sufficient to re-carpet throughout. In respect of books, works of art, television and audio visual equipment a single article limit may apply, be sure to check that you have sufficient cover and for items exceeding these limits please refer to your broker for further advices. Index linking may apply to the contents section of your Holiday Home Insurance policy; however it is important that you ensure that the sum insured is sufficient at outset and each renewal. In today’s market this is particularly pertinent as competition for guests dictates that holiday homes are increasingly furnished to a high standard and equipped with expensive flat screen televisions and accessories such as hot tubs and home gyms.

Loss of rental income

A quality Holiday Home Insurance policy should provide cover for loss of rental income, for insured perils which consequently render the holiday home uninhabitable for a period during which the property is repaired. As it may take some time to rebuild a holiday home levelled by fire or damaged by flooding; cover should be considered for up to two years. Check that your loss of rental income sum insured is sufficient and that your projected gross holiday letting income does not exceed the cover provided.

Should you require any additional guidance or a holiday home insurance quote, please contact a member of Boshers Holiday Home Insurance Team on 01237 429444.

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