Why every listed property owner should check their insurance policy’s wording

With over 20 years’ experience of the hazards of listed property ownership, The Listed Property Owners’ Club has first-hand knowledge of the complexities involved when choosing the correct insurance for your home. Your home is probably the biggest investment you’ll ever make, and when that home is listed you need to take extra care to ensure that it is properly insured. Here, the Club provides details of 8 key aspects you should be checking in your policy wording, and what you can do to ensure you are adequately covered.

Trace and access – the cost of tracing and accessing a leak is something rarely mentioned in the schedule of insurance but the policy wording will contain a limit somewhere or may even exclude any works required to trace a leak in the property. In order to make the relevant openings in the property to establish the source of the leak, whether it is heating fuel or water, can run into thousands. Some listed building owners have had a bad experience with this cover alone where the costs to trace the leak have either not been covered, or been managed so badly it has caused more damage to the property which the owner has then had to repair separately. If the insurer offers a low limit, excludes the cover altogether, or would only allow a member of their panel to conduct the work this should be a red flag as it can be an extremely involved process.

Assumptions about standard construction – on occasion there will be assumptions made about the construction of the property. An insurer may have somewhere in the wording or in your Statement of Facts noted that the property is of ‘standard construction’. This effectively means that the policy is based on the property being built from brick or stone walls with a pitched tile or slate roof. Any deviation from this with a timber frame, cob, thatch, lathe and plaster, flat roof, or anything else could affect your cover in the event of a claim. It is rare that a listed property is completely of standard construction, especially when they have been added to over the centuries. It is always worth checking and having something in writing confirming that your insurer understands exactly how the property is constructed in order to avoid any restrictions creating a nasty surprise in the event of a claim.

Assumptions about security – these will either be shown in the policy wording or in the statement of facts, where an insurer will assume that the property is equipped with ‘minimum security’. This means that all external doors that can be used to enter or exit the property are equipped with either 5-lever mortice deadlocks, locks conforming to British Standard BS3621, or multi-point locking systems, and all windows have key operated window locks. With listed properties it is rare to find that all of these security requirements are complied with and you may find that theft cover is automatically excluded if these protections are not in place. Even worse, some insurers will exclude theft cover if these are not put into ‘full and effective’ operation whenever the property is left unattended. This means that if you leave the house and do not lock the front door (even just for 10 minutes) you may find that theft cover becomes excluded.

Loss of oil / land decontamination – while the cost of tracing and accessing an oil leak is covered under the ‘trace and access’ section of your policy, loss of the oil itself and a potential land decontamination claim is covered under a different section. If oil is stolen at approximately 50p per litre from a £2,500 litre tank, you could quite feasibly lose £1,000 of oil. If there is a significant leak from the tank, the cost of land decontamination can run into tens of thousands or even exceed £100,000 in total, especially if a water source (i.e. stream) is contaminated in the process. Decontamination of land is enormously expensive and certainly not something you would want to personally foot the bill for.

Contents in outbuildings – is there a limit in your policy wording or your schedule for the value of contents in an outbuilding? Most policies allow a limit of something like £5,000 to cover a lawn mower and a few basic tools, however if you have anything more valuable or more elaborate stored in any of your outbuildings you may find that your policy is restricted should you ever need to claim for these items.

General exclusions – all policies contain exclusions to some degree. There are certain obvious ones like ‘deliberate damage by the policyholder’, however there may be others lurking in the wording or in your schedule. Where listed buildings (particularly thatched properties) are prone to fire damage from electrical faults, some insurers will require a current and satisfactory Electrical Installation Condition Report to be held at any given time. Failure to do so may mean that the insurer automatically excludes ‘Fire’ damage. In order to make sure you understand how your policy behaves and operated, it is vital to understand what is included and what is excluded. Some policies are defined by the inclusions which are known as ‘specified perils’ policies, whereas some are defined by the exclusions ‘all risks’ policies. An all risks policy will offer a far greater scope of cover than a perils based wording, so while the policy wording and schedule are tedious to navigate, it is important to understand exactly what you are and are not covered for. Unlike car insurance there is no legal minimum standard that a household insurer has to provide and the majority of household policies are sold as part of a ‘non-advised’ sale, which means it is largely down to the policyholder to ensure they understand the scope of cover. Where period and listed properties are a great deal more complicated it is always worth paying a little extra to ensure you are purchasing as part of an ‘advised sale’, where you will have recourse against the broker for any erroneous or misleading advice.

Single article limits – all policies will contain single article limits. This is the maximum amount payable per item and can be applicable for general contents in the home, personal possessions away from the home, jewellery, fine art or antiques, or anything else that could be covered. These will always be in the policy wording or insurance schedule and dictate the value at which items need to be individually specified on your policy. If for example you have an item of jewellery worth £5,000 that is insured within a total sum of £10,000, but there is a single article limit of £1,500, the most the insurer will pay out for this item unless it is individually specified is £1,500. In this example there would be a £3,500 shortfall purely as a result of not individually specifying the item. If you do have any fine art, jewellery or especially valuable contents in the home it is worth opting for a policy with higher single article limits as you will avoid the onerous requirements of providing up to date valuations and ensuring everything is listed adequately.

The Club has produced a detailed guide for owners with further important information regarding insuring a listed home. Click here to download A Guide to Insuring Your Listed Property. Alternatively, to speak with a specialist call the Club on 01795 844939 and we will pass you onto the insurance team to find out more.