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Cheaper home insurance

Save Money on Insurance Premiums

Cheaper Home Insurance Premiums

Home insurance is a very competitive market and generally in return for the value of the risk covered, most premiums offer very good value. There are however certain things that can be done to reduce premiums further.

Reduce Home Insurance

Obtaining a quote for your property will have been based on your unique set of circumstances. Making your circumstances more favourable to insurers will reduce their perception of the risk and any loads that have been put on your premium could be reduced or removed.

Check your property meets modern security standards-
Insurers base their premiums on the level of risk they feel they are covering. By conforming to modern security standards and making your home as safe and secure as possible insurers will usually discount their premium. It is important to ensure that all windows and doors have locks. External doors should have five-lever mortise deadlocks (British Standard BS3621) and all accessible windows should have key-operated windows locks. Fire alarms are essential in your home whether you insure your house or not. However insurers will often ask whether you have these and may incorporate this into the premium.
Fit fire alarms and reduce fire associated risks-
Fire alarms are essential for your own safety and can sometimes reduce your home insurance, remember however if you state you have them, you must remember to keep them in working order or this may invalidate your insurance if subjected to a claim.
Have an alarm installed-
Having a Burglar or intruder alarm, especially those that are NACOSS- approved will install great confidence with insurers and an area where you are likely to be able to reduce the premium by going above and beyond the minimum security requirements.
Maintain trees close to the property-
If you have trees or shrubs over several metres high within 3 metres of the property it will usually be an insurance requirement that these trees are maintained. Also always employ a qualified professional to remove or maintain trees and shrubs as accidents caused by maintenance are not often covered under standard policies.
Install a safe for high-value items-
If you have and list high value possessions such as jewellery on your insurance policy then it is usually worth having a safe installed. There are sometimes good discounts available for doing this and should pay for itself in time as well as provide that extra piece of mind for both you and your insurer.
Join a neighbourhood watch-
Becoming part of a neighbourhood watch can sometimes reduce the premium offered by an insurer although the discount for this will usually be very small if any. The real benefit of joining such a scheme is the knowledge and advice offered by such a committee which in turn may decrease the chances of you being burgled and thus less likely to claim (maintaining a no claims bonus).

Finding cheaper House and Buildings Insurance

There are many insurance companies offering a number of different insurance products for house and buildings insurance. Below are a few tips that will help you to make savings which can affect premiums when choosing house insurance:

You do not have to insure your property with your mortgage provider-
It is not a legal requirement to have buildings insurance but mortgage lenders will often require it to be in place when you can take out a mortgage. They may offer you their own insurance policy so you can tie it neatly in with the mortgage seamlessly. However it is worth looking around as you may find other competitors to be far cheaper and offer a more comprehensive product.
Compare the amount of excess applicable to the policy (the first amount you pay of any claim) –
Most insurance policies have a standard excess rate to deter policy holders from making claims for small items or incidents that are although covered under the policy and therefore claimable, are not really what the policy is intended for. The rate of excess an insurer requires can vary and when comparing what different policies have to offer, the excess rate is something that should be looked at. Some insurers offer low competitive annual rates for their product but they may set their standard excesses considerably high as well ! The excess can also vary depending on what a potential claim is related to, for example excess for subsidence is usually higher than for the standard excess for the rest of the policy. It’s always worth looking at the ‘small print’ when comparing insurer policies.
Increase voluntary excess-
You can make savings by increasing your excess voluntarily, most insurers give you this option and in return discount your premium. Note though that voluntary excesses are in addition to the insurer’s standard excess. So when you want to make a claim the total excess will be standard and voluntary excess added together.
Combine buildings and contents-
Insurers normally offer discount when you combine insurance cover together such as buildings with contents and also more convenient having a combined renewal date on a single policy. It is worth however, getting a quote for both insurance types together and separately as different insurers assess the risk differently and set their premiums accordingly.
Insure only at the level needed-
The key to finding the right insurance is to know exactly what you want to insure, the cover required and correct level to insure at. Many insurers can be quite flexible with their policies so it is to your advantage to know what values you want covered without estimating. This avoids paying higher premiums than necessary which on a year-on-year basis can soon add up.
Give yourself time to look around for cover when choosing which house insurance-
The insurance market is hugely competitive and each insurer will offer different benefits and premiums for their product. Look at your insurance needs as early as possible and if possible give yourself time to assess what insurers have to offer. It is important to not instantly go for the cheapest quote before assessing the quality of the policy they are offering. If possible ask for the associated policy wording and look at the ‘small print’. What will they cover you for?, what will they not cover you for?, what are the limitations and excesses for the cover? The cheapest cover isn’t necessarily the best value and important areas of cover are sometimes stripped down or removed completely to offer the premiums derived at. At the same time the most expensive premium quotes don’t necessarily offer the most comprehensive cover for your needs, look around and make sure the insurance quote you finalise offers you the best all round value whilst still covering all your specific needs. Although comparison websites profess to do the looking around for you, some insurers are not represented here, they offer cheaper quotations if you go to them directly, as they do not have to pay the comparison web sites for the introductions. Also, do not forget that your local high street insurance brokers are still there and offer good and personal service and can be cheaper than buying policies on line.
Pay the premium in full-
This is often cheaper than paying by direct debit on a monthly basis so it is often worth finding out the details of a direct debit alternative.

November 18, 2015

Home Insurance

Contents Insurance

Living area with contents that should be insured

Contents Insurance

Home Contents Insurance

Contents is defined in insurance terms as household goods and personal property, within the home, which are your property or which you are legally liable for.

Unlike building insurance however, contents is always optional as no other party such a bank or lender will have an invested interest. In most cases it is normal to have house and contents insurance combined but if you own a flat and you share your buildings insurance with other residents known as block insurance it is usually recommended to have a separate ‘contents only’ insurance policy.

What items are included in contents insurance

Household goods and personal property classed as insurable are usually items that you would take with you when you move property.

Standard items such as:

Televisions, computers, cameras and other electricals,
household appliances,
beds, sofas and other furniture,
clothes and jewellery,
pots, pans crockery and cutlery,
Ornaments and toys.

Where possible, keeping receipts for items will help prove ownership, including their brand and model numbers should the need for a claim arise (this can of course prove difficult in the case of a fire).

Although items such as jewellery are for the most part considered standard, insurers will often cap the value paid out for these items in a claim. If you own high value items such as jewellery, paintings and antiques, it is worth informing the insurer of these, some insurers may request that items over a certain valuation be specified and will be noted on the insurance policy itself. The value of these high value specified items can factor into the cost of your insurance premium and if it may be possible to find alternative specialised insurance for that item such as a jewellery insurance policy.

There may be limits placed on contents stored in the open such as the garden area or in outbuildings, where they are not considered as secure as the main property.

Other items that may be offered in addition to standard contents, include domestic pedal cycles, freezer contents, office equipment and cover of possessions for members of the family whilst at University/ college up to a specified value.

Assessing the contents sum insured
When people think about how much contents insurance they are likely to need, they usually come up with a set figure that is more of a rough guess than a good estimate, often because when we assess our contents to determine its value we think of a few key items that are either more important or personal such as a computer, television or pieces of jewellery. They may then think about the cost of replacing domestic appliances such as the washing machine or fridge freezer or the larger items in the house such as the sofa. However, when looking at insurance it is important to think about the worst case scenario. With contents this may be in the event of a fire or flood where all your contents and personal possessions had to be replaced. It may be surprising at how much this would actually cost, not only would you have to replace jewellery, clothes or home electricals but also all your kitchenware including pots and pans, cutlery and crockery, curtains, linen, food, books, dvds and sometimes carpets (varies on insurer and policy type as to whether carpets are listed under buildings or contents insurance). There is a risk of underinsurance, where the values for contents sums insured doesn’t meet the true cost of replacing goods and we have written a good article on Overinsurance and Underinsurance.

What is contents covered against

As standard a contents insurance policy will insure you against:

Fire
Flood
Theft

These are just standard perils but most insurers will include much more as standard in their policies, such as storm damage, subsidence, landslip or heave, falling trees, riots, violent disorder and malicious damage.

The values of the contents sum insured may also be index linked each year so the value of the sum insured increases. This is designed to protect you against rates of inflation so should a claim arise you are not underinsured when items are replaced on a like for like basis.

Getting insurance for contents

Contents can either be insured on its own but is usually cheaper when combined with buildings insurance and accidental damage is normally an optional extra should you require it. If you rent a property you will only require contents insurance as the building will already be insured by the landlord or property management agency. Alternatively if you are a landlord you can get contents insurance for communal areas providing you own the contents you wish to insure.

If you would like a quote for contents then Highhouse will be happy to provide you with a quote, we have our own binder for both home and let property insurance underwritten by the highest rated insurers and can normally have you insured and your documents over to you the same day should you require it.

October 25, 2015

Thatch Insurance Guides

Thatch fire protection

Fireproof Thatch Homes

One of the main issues with thatched roofs is the perceived additional likelihood of their being a fire in the property. It is true that if a fire takes hold in a thatched roof, the result can be more damaging than in a conventional property but we believe a well-managed home is a good risk for insurance purposes. There are a number of precautions you can take towards thatch fire protection to ensure a higher degree of safety in your property:

Ways to help with thatch fire protection

There are three main ways in which you can help to fireproof a thatched property, and if all of these methods are used together then maximum protection against the spread of fire will be achieved. It is advisable to take precautionary measures against the spread of fire as, although thatched homes are safe, the devastation caused by a fire will be much more widespread.

Thatch Insulation Batts

These are manufactured from a lightweight, semi rigid resin bonded mineral rock wool, are water repellent and easy to install. They are compression fitted between the roof joists and are supported by galvanised steel brackets that are fixed to the rafters. The high density and non- combustible properties of the batts reduce heat transfer around the roof timbers in the event of a fire and increase protection from fire on the underside of the thatched roof. An added advantage is that they also improve both the thermal and the acoustic insulation of the property.

In tests on two thatched houses, one containing thatch insulation batts, it was seen that these gave up to one hour extra fire protection to the underside of the thatch, reducing the spread of the flames.

Aluminium Barrier Foil

This is a fire resistant barrier and thermally reflective insulator that is made from heavy gauge aluminium foil. It is applied in the same way as roofing felt, and has the added benefit of providing a waterproof covering to the roof that is advantageous during the roof thatching process. When barrier foil is used alongside thatch insulation batts, the highest possible level of protection from the spread of fire is given.

Fire Retardant Sprays

Two types of fire retardant spray exist, one for use indoors and the other for use outdoors. The outdoor spray is applied directly on to the outer surface of the roof. As it is both water and fire repellent, it cannot be washed out. It must be sprayed upwards and into the thatch at an angle and not only onto the surface of the roof. The indoor spray is used on the internal surface of the thatch and on the supporting timbers. The internal spray does not need reapplication as long as the roof is maintained in good condition, whereas the outdoor spray usually needs reapplication every ten years (it should be tested to assess whether a respray is needed every five years).

There are various different makes of fire retardant spray on the market but they are generally a water based solution containing fire retardant chemicals in a polymer emulsion binder that is specifically manufactured for thatch. They are non- toxic, odourless, fast penetrating, fast drying and bio degradable.

Fire retardant spray should be applied by trained professionals using high pressure specialist equipment. Ideally the roof should have had two hours of sunlight before the application process and there should have been no rain for at least four hours before. The drying time is usually anything up to a maximum of three hours. As damp conditions may adversely affect the drying process the ideal months for applying fire retardant sprays is between the end of March and the end of October.

Safety in Thatched Homes

Many insurers perceive there to be an additional fire risk in buildings of this type but if well looked after by an owner who is aware of their “responsibilities” of owning such a property we feel they are a good risk to insure.

Although homes with thatched roofs are statistically no more likely to catch fire than those with more conventional roofs, because thatch is designed to be water repellent, it can be very difficult to extinguish a fire once it has taken hold. The materials used in thatching burn extremely quickly and, as a consequence, fires in thatched buildings can be devastating.

90% of fires in thatched properties begin due to a fault in the chimney or flue. Precautions that may be taken against fires starting from chimneys or flues include;

Do not build, rebuild or design chimneys without expert advice.
Keep the chimney swept regularly. Twice a year is advisable or quarterly if wood is burnt.
Ensure the top of the chimney stack is 1.8 meters above the thatch. This allows sparks to escape and burn out before settling on the thatch.
Have the chimney checked to make sure that the brick or stone is in good condition where it passes through the thatch.
Insulated lining should be fitted where the chimney passes through the thatch and it is also a good idea to have the chimney lined.
A flue thermometer can be installed to keep a check on the flue temperature.
If the chimney is used by an appliance that results in flue gases it should always be installed according to the manufacturers specifications.
Smokeless fuel is better than peat or coal and any wood burned ought to be resin free, well seasoned and dry. Wet unseasoned wood results in greater deposits in the flue and poses a fire risk.

Other fire precautions inside the thatched property include;

Do not use blow lamps within the roof space i.e near to the thatch.
Do not use heat or flame paint strippers for the removal of paint on surfaces near to the thatch.
Do not install any recessed lighting into ceilings below the thatch.
Ensure that any tradesmen working on your property know the risks of fire from naked flames.
Have the electrics in your thatched home checked every few years.
Have smoke alarms fitted throughout your home. If there is a loft space then it is advisable to have an interlinked smoke alarm as fires that begin in the roof or loft space may not be immediately apparent.
Electrical wiring in the loft space should be run in fire resistant ducting.
A loft hatch of minimum dimensions 600×900 cm should be easily accessible, and the loft should be kept free of storage.
Install fire extinguishers and a fire blanket.
Check the roof space regularly for signs of mice or other vermin as they can cause damage to electrical wiring thus posing a potential fire risk.

Fire precautions that may be taken outside the property are;

Do not mount external floodlights below the thatch overhang as they produce a lot of heat.
TV aerials should be fitted to a gable end or to a free standing pole in order to discourage lightening strikes.
Do not have barbecues, bonfires or firework parties within 100 meters of the property. If it is necessary to light a garden fire then always check wind direction and ensure that it’s prevailing direction is away from the house. Try to avoid lighting a fire in hot, dry conditions.
Install an outside tap with a hose long enough to reach around the property and onto the roof. Ideally this should be lagged against frost.

At Highhouse Insurance Services we provide insurance for thatched homes. We offer cover for your building, your contents or both in a combined policy. We assess each case on its merits and look forward to hearing from you if you own one of these historic properties. The bulk of thatched property that we insure is over 150 years old; however, thatch is making a resurgence as a roofing material and we are equally pleased to discuss your requirements for more modern property.

Via our Lloyds of London Underwriters, we are able to offer terms on many types of Thatched property. We cover the older style which may be listed and have non-conventional materials contained within their walls through to modern buildings with thatch covering and we are pleased that this quintessentially British type of property is enjoying a much deserved renaissance at the moment.

We look forward to hearing from you if you have any questions about insurance for thatched property including all grades of listed building.

Ways to help fireproof your thatched home PDF Guide
Safety in Thatched Homes PDF Guide

July 13, 2015

Thatch Insurance Guides

Advantages and disadvantages of Thatched Property

Thatched cottaged property with advantages

Advantages & Disadvantages of Thatched Properties

Advantages of living in a thatched property

At Highhouse insurance, we are one of the few intermediaries in the United Kingdom that run their own scheme for thatched home insurance. We have a very developed appreciation of Thatched buildings and understand all of the risk factors that go hand in hand within owing this historic type of building; frequently we are able to offer cheaper insurance for thatched buildings as we understand that when looked after and cared for they are no more of an insurance risk than a building of standard construction. If you are seeking more information relating to this quintessentially British building, we hope you find our following article to be of interest.

Most thatched homes tend to be very old and this often means that they have large gardens and are built in excellent locations. The reason for this is that, due to their age, there were many good places to choose to build such properties. Often thatched properties are found near to a natural water supply and are on sheltered, slightly sloping land which gives good drainage and, thus, reduces problems with damp.

The thick straw or reed roofing provides excellent natural soundproofing from overhead aircraft as well as road traffic nearby. Likewise, it gives great insulation meaning that the thatched home remains cool in summer but warm in winter, helping to keep fuel costs low. The smaller windows that are normally to be found on such a property also contribute towards this insulating effect.

Due to their age, thatched houses usually have very thick, solid walls which are advantageous over modern cavity filled walls. In summer the heat from the outside travels very slowly to the inside ensuring that the temperature within remains cool.

The weatherproof thatch on the roof can withstand very strong, even gale force, winds and is very rarely prone to leaking. Leaks are usually caused by one of the wooden spars that are used in the ridge becoming broken and sometimes, after a spell of dry, warm weather the thatch may open slightly and then leak when it rains, however this is self-healing as the thatch will close again naturally.

Disadvantages of living in a thatched property

Due to their age and sometimes remote locations, not all thatched properties will be connected to a mains water or sewerage supply. Instead, water may be drawn from a nearby private or shared well, and either a cesspit or septic tank may be used for sewerage. Cesspits need frequent emptying, therefore a septic tank is preferable as they do not require as much attention as long as they are well below the ground level of the house and have good draining soil surrounding them. Also as a consequence of their remote location, thatched homes may not have any nearby street lighting and it may be necessary to install outside lights on the property.

Due to the old, solid walls and base and the lack of any damp proofing in such properties, the interior walls may suffer from damp caused by moisture rising from ground level.

In wet weather rain tends to cascade down the roof and falls in a constant stream around the entire perimeter of the house (it is unusual to find guttering on a thatched house) which continues for a time even after the rain has ceased. The rain splashing on to the ground can be the cause of mud spots forming on the exterior of the house and may cause green mould growth too. However, this is easily remedied by cleaning with a bleach solution.

The materials used in the thatch mean that the roof is at threat of attacks by birds that are nesting or are looking for insects. Holes may appear in the thatch and should be repaired as soon as possible as, left unrepaired, the birds will concentrate on these areas and the holes will become much larger. Most bird damage to roofs tends to be under the eaves or at the junction of the chimney and the roof. Some roofs have wire netting in these places to prevent this occurring, whilst others are completely covered by wire netting. Unfortunately, roofs that are totally covered by wire netting are often subject to higher insurance premiums as there will be the added difficulty of pulling the wire netting off in the event of a fire. This will delay the fire from being extinguished and result in more widespread fire damage.

Although thatched properties are no more likely to catch fire than regular homes, when a fire does break out the damage will be much more significant as fire spreads more rapidly in thatch. For this reason, insurance premiums will be higher. However as mentioned earlier, if you ask us at Highhouse insurance to quote for your thatched property , we will do our best to save you money.

It can be seen that whilst there are disadvantages of living in a thatched house, these are relatively minor and the advantages of living in such a charming and unique home may outweigh them.

Advantages of living in a Thatched Property PDF Guide

June 10, 2015

Listed Insurance Guides

Insurance for Commercial Listed Buildings

Insurance for Commercial Listed Buildings from Highhouse

We have a number of facilities that will enable us to quote for listed buildings that are used for commercial (business) purposes. When you first contact our office we will undertake an initial assessment of your details to ascertain on what basis your property should be insured. In many cases, particularly where the building is designed and used as a private dwelling as well as a business, we may be able to issue a standard home owner policy. For example if you live in say the upper portion of the property but use the basement as a studio or consulting rooms, we can often insure you on a domestic policy with the cover suitably endorsed to note the business use. You will of course be responsible for arranging suitable business insurance including liability.

In all other circumstances, we will need to insure your listed building on either a commercial property owner’s basis (in instances where you are the landlord and you rent the property to tenants) or on a business combined basis if you also want to say cover your stock and liabilities.

A listed building is one that is of special interest and the listed status protects it from certain alterations which helps to preserve the building in it’s original state. Owners of listed buildings who are intending to use the property for commercial purposes will discover that there will be restrictions on the usage of the property as well as on any alterations to make it suitable for commercial use.

When obtaining an insurance quotation the Insurance Company will need to know the full details of the listing and also the materials employed in the construction of the building. At Highhouse Insurance we can quote for all grades of listed building.

Insurance companies are very cautious when quoting on a commercial listed building as they are aware that in the event of a claim, costs can be very high. This is because the length of time for any repairs to be completed is usually much longer than with standard construction commercial premises due to the fact that the correct permission must be obtained and consultants often need to be brought in to supervise work and ensure it is of the correct standard. Delays can arise when building materials are sought, for example, a specific type of stone. As it is usually necessary for professionals with listed building experience to carry out the repairs, the cost of the work will reflect their expertise. This increased cost of repair is shown in the higher insurance premiums on listed building insurance. When quoting the Insurance company will also require full details of either your trade or the trade of the tenant and will need to know about any materials stored in the property.

Private residential listed buildings can sometimes be converted into commercial businesses if they have obtained the necessary planning approval. Planning approval is, however, very restrictive and it may be impossible to for example remove existing windows and replace them with a glass frontage. Likewise, it may not be possible to add a nameplate to the outside of the building or to alter the inside in a way to make it more visitors friendly. Insurers will need to be told exactly how the commercial listed building operates and if there are any split usages within the building.

Although insurance premiums are higher in commercial listed buildings, it is not normally that difficult to obtain a quotation and subject to full information we will be pleased to assist you with either a quote for just your building or to include your business risks as well.

Subject to full underwriting details, we can normally supply standard insurance perils that would be suitable to secure a mortgage on a property and to satisfy a lenders conditions. Examples of listed commercial building we insure include; public houses, tea rooms, bed and breakfasts, hotels and guesthouses. We also have a number of customers who run business from their home and we are happy to quote on these as well.

We also have facilities to quote for religious buildings such as chapels, churches and mosques including grade 1 listed buildings used as places of worship.

We have many years’ experience in placing insurance on these special building and we welcome your enquiry

June 10, 2015

Flat Guides

What is a Lease

What is a Lease?

We are able to offer insurance for buildings that have been divided in to self-contained flats. These flats can either be purpose built with concrete floors or houses which have been converted in to flats.

What is a lease

Whatever type of flat you own, in all but rare occasions, you will own it on a lease. A lease gives you the right to occupy your portion of the building and use the common parts for a certain period of time. A typical lease would be for either 125 years or 99 years. At the end of the lease period the “ownership” of the flats reverts back to the freeholder.
Leases have been developed to give property owners a legal entitlement to land and buildings where it is not possible for them to own the freehold. Leases vary greatly and contain both basic elements and also special terms relating to the specific building. They are made in duplicate and the counterpart is held by the landlord. All the counterparts together form the management company or freeholders association title to the property. Most leases within the building will be the same. Its sometimes difficult to grasp that even though you have purchased a flat, if it is on a lease, you will in fact be a tenant, albeit it one with the right to occupy your property for a considerable amount of time. A lease is a contract between a landlord and a tenant. Each party’s rights and duties are formally written out. The duties are called covenants. Each flat owner ought to have had the lease explained to him/her when buying the property and should be aware of its terms. The owner or landlord will be paid ground rent and a service charge by each individual flat within the block and there will also be rules relating to behavior within each flat and repairs of the property.

The tenant’s covenants

Rules within the lease cover a variety of things. Most of them will be easy to understand and will not need any intervention from the management company or tenants association or group of tenants if things are run on a more ad-hoc basis. The covenants that interest leaseholders usually relate to the collection of money for the ground rent and the service charge.

Ground rent is normally a small sum (a peppercorn amount) and it may give the landlord a small income. If the tenants all group together and buy the freehold then this yearly amount is paid to themselves and it can be used to subsidise the cost of maintenance and insurance.

The service charge is a necessity whoever owns the freehold as it is used towards building insurance premiums and general maintenance. It is usually a good idea to keep money in a fund as the collection of charges can sometimes be a long drawn out affair especially if any of the leaseholders do not live on the premises

Types of Leasehold Clauses

‘Quiet possession’ is a clause that is to be found in every lease. It means that as long as the flat owner carries out his/her duties and obligations, then the lessor has no right at all to interfere.

The freeholder or his delegated managing agent must ensure that the building is covered by insurance (building, not contents) with a block policy. The insurance cover will need to be studied to make sure it is suitable for the leaseholders to be able to secure a mortgage. Often a leaseholder’s mortgage provider will want their interest noted on the policy schedule and in the event of a serious event such as a large fire, they will expect to be notified.

The cost of this insurance is recoverable from the flat owners by working out what proportion each is to be liable for. Building Insurance is paid in this way as it would not be possible to make sure that the entire building was correctly covered by insurance if each individual were to only be responsible for their own part of the building. Many leaseholders still try to obtain building insurance for a single flat but this is not to be recommended.

The Freeholder has a duty to maintain the building. This is an ongoing obligation. The cost of the maintenance and repairs are recovered under the service charge. The flat owners will expect the service charge to be used in an efficient way and, for this reason; another duty of the freeholder company is to produce comprehensive annual accounts for the flat owners. In practice, these are sometimes difficult to obtain.

If you have any question with regard to your ability to purchase insurance for a building that has been divided in to a flat, please do not hesitate to contact us, we will be pleased to assist.

May 18, 2015

Flat Guides

Valuing Freehold Interest

Freehold Interest on Valuations

At Highhouse Insurance we are often asked to quote for Buildings Insurance in respect of property that has been divided in to self-contained flats, either purpose built or converted property. One of biggest areas of confusion relating to this type of cover surrounds who is who is actually responsible for the insurance; is it the freeholder or is it the leaseholder. Generally speaking in most cases, the freeholder is responsible for the buildings insurance and will charge the leaseholders accordingly. In some cases it may be possible for us to provide cover for leaseholders and we are always willing to listen to situations where for whatever reason, the freeholder has not arranged insurance cover.

Many leaseholders chose to buy the freehold of their property to give them control over the building they own, this will then give them the right to make decisions and to manage the property as they feel fit.

If you are contemplating purchasing the freehold of the block of flats that you live in, it will be necessary to get a valuation from a local qualified surveyor before you enter into any negotiations. A surveyor will be able to complete a valuation according to the current legislation; will advise on purchase price and the offer that ought to be made to the freeholder in the Initial Notice and the freeholders response in the Counter Notice. He/She will also carry out negotiations on your behalf with the freeholder, give advice and provide evidence at a leasehold valuation tribunal as well as giving advice regarding repairs and maintenance of the property once the enfranchisement has been completed.

At the first meeting with the surveyor the valuation process should be discussed. According to Schedule 6 Part II of the Leasehold Reform, Housing and Urban Development Act 1993 the price of the freehold should include the income received from the ground rents within the building, the increase in the sale value of the flats due to the freehold being obtained (this is called the reversion value), the marriage value (this is the increase in flat values minus ground rents and the reversion value), the value of other interests e.g. garages and commercial properties, and compensation for losses to the freeholder for the reduction in value of another property resulting from a forced sale (injurious affection).

Freehold property with a long lease is valued on an investment basis, meaning that the property has no other value except for the income from the rent and the reversionary value once the leases have run out. The freehold value is worked out according to the expected future income of the property.

The income received is easily worked out. The annual ground rent is multiplied by the number of flats in the block. This amount is then multiplied by the ‘years purchase’. The ‘years purchase’ may either be taken from a set of tables or the valuer may calculate this for himself/herself. It is done to ascertain what the investor would have to pay to get the same fixed income over the term of the lease. There are often discrepancies to be looked at as the leaseholder’s valuer and the landlord’s valuer will often come up with different amounts for the years purchase figure.

As the lease on a leasehold property gets shorter the value of that property decreases. If enfranchisement is achieved then the new owner will usually increase the time on the leases. The values of the flats within the building are, consequently, increased. The valuer will need to consider other properties in the vicinity to estimate how much the value will increase. Flat leases usually revert back to the landlord once the term of the lease has expired. However, it is most likely that the tenant will be able to remain in occupation as there is statutory protection to ensure the tenant still has somewhere to live.

The marriage value involves both parties and is worked out quite easily. The value of the property with renewed leases is the base figure and from this the current value of the properties are deducted. Then the ground rent and the reversionary value are also deducted leaving the ‘marriage value’. This amount is split equally between the two parties. Legislation states that if a participating leaseholder has an unexpired lease of in excess of 80 years then any marriage value will be irrelevant.

In cases where negotiations do not run smoothly it may be necessary to enter more formal arrangements to bring matters to a satisfactory conclusion. The Leaseholders Valuation Tribunal is of help when trying to decide on matters like the sort of interest to be applied and the price to be paid.

There is a myriad amount of information relating to the value of freeholds available on the internet we believe if you are contemplating the purchase of your freehold, you should always seek professional advise.

Highhouse Insurance will be pleased to quote for buildings insurance for all types of blocks of flats whether owner occupied or rented to tenants.

We look forward to receiving your enquiry.

May 14, 2015

Business Insurance

Shop Insurance

At Highhouse Insurance we have access to many insurance markets offering shop insurance quotes and are able to offer cover for almost any type of establishment regardless of the type of goods it sells.

The policies that we arrange come on a package basis and we can quote for any of the following;

Landlords owning shop premises that are rented to tenants and are just looking to insure the Buildings, Property Owners Liability and Loss of Rent
Owners of shop premises that occupy them and run a business from the property
Business owners who rent premises and are looking for a “Shop package” quote

Shop Policies for Landlords

If you are a landlord owning a commercial property that you rent to a business that uses the premises as a shop, we can insurance cover for you on a “Buildings only” basis covering a wide range of perils suitable to secure a mortgage on the property with the ability to extend to accidental damage if required. As well as cover for the fabric of the building we will include insurance for your liability as property owner and cover in respect of loss of rent receivable from your tenant in the event of say a serious fire or a flood. In order to obtain a quotation, we will need details of the building as well as information relating to what type of shop business is run from the building and whether any manufacturing is carried out from the premises.

Package Policies for Shop Proprietors

Our shop polices are arranged on a package basis, that is to say they come with a number of “core” covers to protect your business needs and a range of “optional” extras which you can pick and choose as required.

Shop Contents Insurance

Our main core cover relates to the insurance of the business contents and in any business this will usually include;

General shop contents which you own or are responsible for which could include such items as ; fixtures & fittings, shelves, counters, display cabinets, fridge freezers and signs
High Risk contents which could include; Computers, Tills, EPOS systems etc.
Your stock
Goods you have in trust (For example if you run a repair shop you may have customers goods on your premises)

Extensions to this section can typically include your “Shop front” (some Landlords may make you responsible for the shop front and in particular any plate glass fitted in to the building) and “Frozen “stock if you carry goods of this nature.

Insurers rate premiums depending on the type of trade carried out, so for example a shop that sells Flowers will attract a cheaper shop insurance premium than a business that retails Electrical goods

Adding on the Extras

All shop proprietors will undertake an assessment of their business risk and choose the level of insurance they think appropriate and of course to suit their budget, what we like to do at Highhouse Insurance is make you aware of the covers that are available so you can make an informed decision as to what you should in fact purchase.

Shopkeepers Liability Insurance

Many package insurance policies will include liability insurance as part of the core cover, if it is not included, we believe it should be as it is essential for any business and in the case where you have employees, it is of course a requirement of law. Public liability for a shopkeeper comes in three separate sections;

Public Liability Insurance
Products Liability Insurance
Employers Liability Insurance

Public Liability will protect you from claims from members of the public that come on to your premises and are injured, this is of course an infrequent occurrence but even in the most well run establishment in can happen and when it does , claims for compensation can be high. Even if a claim proves to be unfounded, a defence has to be undertaken and this in itself can be a costly and time consuming process. If you are retailing any type of goods, you can be liable for a claim from a member of the public for products liability. Although there is usually a right of recourse against the manufacture of a product, this is not always a guarantee that you will be protected and in the case of a person becoming ill say through food poisoning, it may be possible to prove that your business was negligent in the way it handled or stored goods and you could end up facing a claim for compensation.

If you have any employees, you are required to have employer’s liability insurance (and to keep proof that you have held cover for a period of ten years). The employers liability protection act places a very wide definition of the word “Employee” and you cannot assume that a person say just helping you out, even if unpaid, will not fall under the definition. You must insure for a minimum of £5,000,000 although many of our polices will automatically include a higher limit

Business Interruption/ Loss of Income

In our opinion the above is an extra cover that it would be very unwise not to effect. Most business proprietors can see the relevance of insuring stock and contents but sometimes, especially if you have not witnessed the devastated effects of say a fire or a flood, business interruption cover is overlooked.

Following a serious occurrence there is often a period of time for the reinstatement where the business cannot trade or trade properly resulting in a loss of income, even when trading is fully restored there may be a down turn in turnover as perhaps customers have gone elsewhere. A serious question any business owner should ask themselves is how long the business could or you personally sustain a period of a reduction in sales income. Business interruption can come in two separate types, depending on the type of business you run, one or the other may be more appropriate to you

Increase Cost of Working

Some business simply find it quite easy to up sticks and move to other premises nearby and trading can often be continued with the minimum of fuss but with additional expenditure, other business, this is simply not possible and insurance is available to cover loss of gross income. At Highhouse, we can help you decide what level of cover you require that is best suited to your needs, this may include insuring on an Income basis

Income is defined as, the money paid or payable to you for the goods you sell less your outlay to buy the stock or raw materials- Insurers will also factor in the value of the stock you held at the beginning of a financial year as against that held at the end). Even though you may not be trading some of your business costs may be fixed, these could include heating, lighting,rates and of course employment costs and all of these will need to be factored in to any calculation.

There are a number of “extensions” that can be added to a business interruption section as some claims can result of an occurrence beyond your control, these can include

Denial of Access.-Sometimes, access may not be possible to a business because of an occurrence happening at a neighbouring property. Failure of Public Utilities-If there is an accidental failure of public utilities serving your shop (as opposed to a deliberate action such as cutting off services following failure to pay a bill) you may find that trading is affected. Death or Disease or Closure- Sometimes a business is forced to close for a period of time following a death on the premises or a customer becoming ill

Failure of Suppliers- Sometimes an event occurring at another business supplying your goods may result in loss of business to you, this is particularly important to a business that is operating say as a franchise and stocking goods from one supplier

In practice many of our modern policies now include a fixed sum insured for small business owners which is often far in excess of the actual needs required, this can help guard against under insurance in respect of this very valuable cover.

The above represent what we at Highhouse feel to be the minimum covers you should insure for, but we can also introduce you to other sections of a policy which you may want to consider depending on your business needs, these can include

Loss of Money
Staff Honesty
Loss of Licence
Business Legal Expenses

Many shop keepers do not stop to think of what would happen to their livelihood, if there was a serious occurrence such as a fire or flood at the premises. Many do not realise that you can insure against such contingencies and this section of the policy could, if you pardon the expression, keep your business afloat in the event of an enforced period of being unable to trade. Following a loss, some costs remain fixed and will continue, even if you are unable to trade, many businesses are unable to sustain a period of no income and thus it is essential that adequate protection is secured, via this section of the policy. The actual sum insured your will receive can be calculated as two separate amounts and depending on the type of shop you run, either or both may apply. They are as follows: 1- Gross Income 2- Increased Cost of Working, the additional expenditure necessarily and reasonably incurred, to carry on running your business, following a claim and during the time your insurance company are carrying out reinstatement. Some modern policy wordings, will not ask you for your gross profit figures, they will simply pick a sum insured for you, This can be ideal for a small business as the sum insured is usually, far higher than is needed. However, you need to pay close attention to the sum insured as you will not be properly protected if the sum insured is not adequate.

Whatever type of shop you run, we look forward to receiving your enquiry.

May 11, 2015

Listed Building

Non Standard Home Insurance

Insurance for non standard buildings

Non Standard Home Insurance

If your home building is of a non-standard construction it will require non standard home insurance and may be subject to an increased premium when paying for building insurance. When calculating premiums the insurers use a standard definition assuming that the building is of standard construction and is not unusual in any way. There is usually a question on a proposal form or it may even be contained within a statement of fact document.

Non-standard types of building are deemed to be those that do not fall into this category and a premium is usually added when quoting on anything that falls outside this norm. Some insurers will not quote for certain types of non-standard building at all. Standard construction includes buildings that are made of brick, concrete or stone with roofing constructed in slate, tile or concrete and all sitting on concrete foundations. Some insurers will allow felt and metal as standard roofing materials depending on the proportion of the roof that is flat.

Insurers refer to a roof that is pitched as standard. If any of the roof is flat in its design, as is usually the case with any extensions to the original building, an insurance quotation will typically be covered by standard rates as long as the flat part of the roof does not exceed more than 20% of the total roof area. This is because flat roofs have tended to leak and their life expectancy is approximately 10 years.

Brick, mortar and stone are the usual materials to be used in the construction of a building. However, there are other non-standard materials also to be found which are listed below.

TIMBER FRAME:

Many houses are nowadays made using timber frame, as were old style buildings which are now listed properties. Insurers sometimes class these as standard construction as they are of a sturdy design. Holiday chalets which are made wholly of wood are always seen as non-standard.

COB:

Cob is made of mud mixed with straw or with animal dung, rendered with cement. This may mean that it is unable to dry out and, therefore, it will be likely to decline and collapse over time. Modern cob is now pre dried meaning that this does not occur.

WEATHER BOARDING:

This is added for decorative purposes and is not part of the actual construction of the building. It may aid protection of the building against the weather conditions.

MUNDIC BLOCK:

Many homes in both Devon and Cornwall were made using waste mining materials because it was available cheaply in the area. These houses have been susceptible to decline over the years due to the fact that impurities found in the waste materials have caused chemical reactions. Consequently, it is highly unlikely that any insurer will give a quotation on such a property. Likewise, it is doubtful whether any mortgage provider would secure a mortgage on a property that is constructed using mundic block.

THATCH:

These properties are classed as non-standard due to the fire risk. Although statistically a thatched property is no more likely to catch fire than an unthatched one, due to the materials used in the thatching if a fire starts the damage could be more wide spread.

WATTLE AND DAUB:

This consists of a woven lattice of poles or stakes that are covered by a mixture of clay and sand or straw and dung. The wattle and daub is then whitewashed to help with waterproofing.

As well as these building techniques a property may contain asbestos, plastic sheeting, corrugated iron, metal, prefabricated materials or strammit. If you think that any of these materials or construction methods have been employed then your insurer should be informed when obtaining an insurance quotation. If you are not sure what your property is made from then it is advisable to look at your survey report or to consult a surveyor. Any false declaration to an insurance company with regard to your property will mean that your insurance could be invalid and any claim will be declined.

At Highhouse Insurance, we have facilities to quote for a wide range of non-standard buildings. We speak to many people who have found it difficult to find suitable insurance for their property and we are pleased that in the majority of cases, we are able to offer assistance.

May 6, 2015

Listed Insurance Guides

Listed Building Consent

Listed building planning and maintenance requirements

Planning and Maintenance for Listed Buildings

At Highhouse Insurance we deal with and specialise in covering all types of Listed Building Insurance including Listed Tenement Blocks in Scotland. Our insurance covers a wide range of perils suitable to obtain a mortgage and unlike some insurers; we are also able to cover buildings of non-standard construction.

We have a good understanding of the problems faced by the Listed Building owner and are always willing to speak to owners or persons that are contemplating buying this special type of property. This article looks at the effects of listing a building as well as planning and maintenance.

The effects of Listing a Building

Owning a listed building comes with many responsibilities and owners can find themselves as unpaid guardians of our nation’s heritage. Certainly buying a listed building is not something you would undertake likely particularly if you have designs on making changes either internally or to the fabric of the structure.

As soon as you take on ownership of a listed property you realise that things may not be as straight forward as owning a non-listed property, particularly if you want to make alterations or upgrades to the property.

Whatever grade of listing a building has, any demolition or alteration, both within the building and externally, will need consent if it is to affect the architectural or historic character of the property. The definition of what exactly is meant by the term ‘building’ is not always clear cut. A building does not always stop existing because it has been taken down and an order to reconstruct it may be issued.

The list of structures that have been called buildings includes telephone boxes, drinking troughs and sculptures. The situation is further complicated by the Planning (Listed Buildings and Conservation Areas) Act 1990 which enables the development of adjoining sites affecting the setting of a listed building to be looked at as part of the Act.

In the definition of a listed building the Planning (Listed Buildings and Conservation Areas) Act 1990 includes any structure or object within the curtilage of the building even if it is not fixed to the building as long as it was there pre 1st July 1948. The Act refers to the preservation of any feature of the building consisting of a man- made object or a structure fixed to the building. The term ‘fixed’ is understood to mean physically attached to and it, therefore, includes fireplaces, shutters and balconies for example. The legal guidelines are not completely clear and state for example that statues that are a part of the architectural concept are fixtures although statues placed there to be seen in their own right are not. The same reasoning may be applied to tapestries and chandeliers.

The position regarding the painting of listed buildings is inconsistent. Consideration is given as to whether painting affects the character of the building. Painting a surface that was previously unpainted would need consent but repainting using identical colour paint would not. However, if there is any change at all in the texture of the paint consent will be required. Due to uncertainties such as these, some areas have sought to introduce some controls of their own, the City of York for example introduced a by law to control the painting of buildings within the city walls and the importance of the colour of a façade is not only limited to paint colour but also to any changes in the colour of the glass in the windows.

The penalties for unauthorised work on a listed building upon summary conviction are a fine of up to £20,000 and/or imprisonment not exceeding three months. On indictment imprisonment may be up to twelve months and the fine is unlimited. The fine is required to reflect the financial gain arising from the offence. As well as a fine and/or imprisonment there will also be an order to reinstate the works, the cost of which may exceed the fine. Failure to take action to rectify a breach may be penalised on a daily basis.

Listing usually involves an increase in the annual maintenance cost and, consequently, a high service charge to occupiers of dwellings within listed buildings. Insurance costs are likely to be higher reflecting the increased cost of reinstatement, and there may also be additional security requirements if the building contains valuable fixtures and fittings. Administration costs increase with possible disaster plans to minimise loss in the event of fire or explosion and there will be increased costs associated with obtaining consent with the local authority. The work is likely to be more expensive because one-off items need to be made to match the existing ones. The time it takes to get the necessary approval can mean that the work is delayed and the use of the property may be affected in the meantime.

Although the listing of a building may have some burdens there are also some advantages with regard to approved alterations. These may have some tax relief and your accountant or local authority should be able to assist you with an enquiry.

Listed building consent

In Section 7 of the Planning (Listed Buildings and Conservation Areas) Act 1990 it is stated that nobody may “execute or cause to be executed any works for the demolition of a listed building or for its alteration or extension in any manner which would affect its character as a building of special architectural or historic interest, unless the works are authorised.” Consequently, Listed Building Consent (LBC) is needed when alterations and repairs to listed buildings are to be made. Planning permission will also be necessary for any extension and for some external alterations. Approval under Building Regulations is usually required too, for both internal and external works. Listed building consent may also be needed for any work on buildings or structures within the grounds of a listed building.

It is essential to carry out routine maintenance of a listed building in order to avoid major works or repairs. Wherever possible like should be replaced by like as traditional materials give listed buildings their unique character. Existing materials on the building should be repaired rather than being replaced, and where work is unavoidable it should avoid damaging old work. Features that are missing should only be replaced when there is evidence that they were there originally.

Listed building consent is required for any demolition, extension, alteration or stone clearing which affects the character of the listed building in any way at all. This may mean that often very minor works, such as door replacement, will need consent. If there is any doubt as to whether consent is required then the Conservation Planner at the Local Authority should be consulted. Examples of works which will need LBC are conservatories, porches, extensions, demolition work, repairs made in materials differing from the original materials, the sandblasting of both internal and external stonework, the removal or alteration of internal doors or panels or fireplaces, exposing timbers that were previously hidden, painting brickwork, installation of satellite dishes, the fitting of new boilers or ovens that need a flue, replacing windows and making internal partitions where none existed previously. This is not a complete list and the Local Authority Conservation Officer should always be asked if LBC is a necessity before work is carried out.

Anyone who carries out work to a listed building without getting the required permission first where the character of the building is affected will, if convicted, be guilty of a criminal offence and this can result in a large fine or in imprisonment. Enforcement action may be taken to restore the building to its original state. There is no time restriction under which these proceedings may be taken. Often the failure to get consent is discovered upon the sale of a listed building. Before buying a listed building it is, therefore, important to check with a solicitor that all works that have been carried out have had the necessary consent, as, if you purchase a listed building with any unauthorised works you then become liable for them. To obtain your quotation for insurance for a listed building including homes with thatched roofs, call Highhouse insurance today.

On occasion it may be necessary to undertake emergency works on a listed building. In such cases the work should only be done if afterwards you are able to prove the following:

That the emergency works were needed with urgency due to health, safety or the preservation of the building in question.
That it was impossible in any way to provide temporary support whilst Listed building consent was sought.
That the works carried out were the least that could be done as a matter of emergency.
That notice in writing which explains in detail exactly how and why the works were done is given to the Local authority as soon as reasonably possible.

The owners and occupants of listed buildings are responsible for maintaining them in a good state of repair. Any listed buildings that have been allowed to fall into disrepair may be added to the Buildings At Risk Register and this will mean that the state of the building will be closely monitored and, if it does not improve, the Local Authority can ask that an Enforcement Notice be served for all the repairs to be carried out.

Before buying a listed building it is essential to comprehend that permission for any alterations may not be granted. However, it is also worth knowing that any new works to listed buildings that have received consent may be eligible for zero rated VAT, meaning that the VAT can be reclaimed. Work done to maintain or repair the listed building are not eligible to be zero rated.

At Highhouse Insurance, we have excellent relationships with our underwriters and a real understanding of this building type, which enables us to offer excellent premiums for both Buildings & Contents for Listed Buildings.

May 5, 2015