The Home Insurance Policy Made Easy
By: Trevor Dace
The house insurance product has two alternative options and the price that you pay depends on the options that you choose.
The products can be categorized into standard cover and accidental damage (or all risks). If you opt for standard cover, you have to check any loss you have with the list of 'peril's against which you are insured. If you can't match your particular claim to one of the perils on the list, you are not insured. The 'onus of proof' is on your shoulders. In other words it is you that has to prove the cause of loss is covered.
If you purchased accidental damage cover, you then have the equivalent of a fully comprehensive policy on a motor car. By choosing this style of policy you are covered for any and every possible type of loss, apart from those listed in the exclusions (small print). With this type of policy The 'onus of proof' is passed over to your insurer. In other words that it is up to them to prove that you are not insured against that risk.
Standard Cover
You should have a list of risks insured together with another list of exclusions that apply only to that peril. It might look similar to this:
- Fire, Earthquake, Explosion, Smoke, Lightning - excluding damage caused gradually
- Aircraft plus articles or parts dropped from them
- Impact by animals, vehicles or falling trees or branches - apart from damage caused by lopping or felling trees
- Theft or attempted theft - apart from losses that occur if the property left empty for over thirty days or left unfurnished or stolen by a tenant or paying guest or lodger.
- Malicious Persons - the same exclusions as for theft
- Burst Pipes - some include frozen pipes whilst others exclude it
- Flood or Storm - excludes damage by freezing and damage by storm to fences, gates and hedges
- Civil Commotion, Riot, Strikes, Political Disturbances or Labour Disturbances
- Leakage of Oil
- Radio receiving aerials, Mast breakage or collapse, Television Aerials, Satellite dishes
- Subsidence - A very tricky subject that needs a complete article all to itself
We will run through each of these in greater detail.
FIRE - Provided that there are actual flames then there shouldn't be a problem. If there was also smoke damage to your property from the fire, will also be covered. You certainly can't claim for the discolouration to your fixtures and fittings 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 further exceptions to the rule that there has to be flames but they vary greatly from one insurer to the next, so you ought to check them carefully in your policy.
LIGHTNING STRIKES - you are fully covered against any damage to your building caused by a lightning strike. If lightning strikes your aerial, sorry but that is a claim on your contents policy! Although aerials are detailed as an insured risk, they do not appear in the definition of a building. They do appear in contents. So damage to aerials constitutes a contents claim. It's the same story with explosion and earthquakes. Thankfully for us these are few and far between here in Britain.
AIRCRAFT - This covers anything dropping from anything that flies. Again, luckily for us, an extremely rare happening.
IMPACT - The idea is that if your house is hit by a car or a wild animal, you are covered. With trees, if you have arranged to have your tree felled 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 their actions damage your property, then you have the right to seek recompense for the damage from them. However your home insurance policy will still exclude this damage so you cannot ask your insurer for help.
THEFT - Cover is fairly comprehensive, that is the exclusions do not greatly limit the cover provided. Where your house is left empty for any length of time (e.g. thirty days or more), then cover is restricted as the property is recognised as a more tempting target for burglars. Indeed, if your house is to be left unfurnished or unoccupied you should inform your insurer anyway! Similarly with a tenant or lodger. The risk of the tenant or lodger taking part 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 inform your insurer.
MALICIOUS PERSONS - In many ways this is the same as for theft.
BURST PIPES - The insurance companies attitude on this has gradually changed over the years for the better. A good company will cover any leak, from any tank, pipe or water apparatus, even if it has been leaking over a lengthy period. Some insurers will nowadays include damage caused by frozen pipes defrosting. When I first started working in this industry, it was always the case that the pipe itself was not covered, only the water damage caused by the pipe bursting. Where there is clear evidence that the pipe has burst because of corrosion or rust then your insurer might still use this argument. If a pipe is holed by a nail, say when fitting a carpet, then you will need accidental damage cover for the repair to the pipe but the resultant water damage to your building is paid for under this peril.
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