Do your door locks conform to BS3621?

When it comes to filling out home insurance proposal forms, you will most likely be asked about the types of locks your doors have. It is important to make sure you know this as it might affect the price of your insurance policy, lead to a claim payment being reduced or refused as well as possibly invalidate the policy if the information is incorrect.

Here are four main types of door locks that might be in your property:

Five lever mortice deadlock

Five lever mortice deadlock conforming to BS3621

Key operated multi point locking system

Rim automatic deadlatch

 Now, how do you tell if you have one of these locks? Here is how to find out and a brief description about these types of locks.

1. Five lever mortice deadlock

 Do I have this type of lock? Most likely if:

  • The door is made of wood
  • The door is lockable from both sides with a key
  • The words ‘5 LEVER’ are engraved on the faceplate

Most likely not if:

  • The door is UPVC or composite
  • The lock is on the surface of the door

This type of lock is a standard deadlock and is not the most robust when it comes to security. You would most likely see this type of lock on an external front door and an external back door. The location of the lock would be in the leading edge of the door.

Click here to see what a 5 lever mortice deadlock looks like.

2. Five lever mortice deadlock conforming to BS3621

 Do I have this type of lock? Most likely if:

  • The lock has the British Standard Kitemark engraved on the faceplate
  • The words ‘5 LEVER’ are engraved on the faceplate
  • The face plate of the lock will state the standard code BS3621

Most likely not if:

  • Found on internal doors
  • There are 3 levers

 This is the door lock of choice for many insurers and some insurance companies might insist you have this type of lock to get cover. This type of lock is much more secure than a standard five lever mortice deadlock due to its anti-pick qualities, hard plates to protect the lock from drilling and having a minimum of 20mm bolt throw into the door frame.

Click here to see what a five lever mortice deadlock conforming to BS3621 looks like.

3. Key operated multi point locking system

Do I have this type of lock? Most likely if:

  • The door is UPVC or composite
  • You turn the handle up to lock it and turn the key
  • There are multiple lockable points along the height of the door

Most likely not if:

  • There is more than one lock cylinder
  • If your house is older and less modern

A multi-point locking system will engage at least three bolts into the door frame at different height intervals. More locking points make it harder for burglars to enter. You often see these types of locks on external doors such as patio and French doors. The advantage of having this type of lock is that you can upgrade to a better standard cylinder.

Click here to see what a key operated multi point lock system looks like.

4. Rim automatic deadlatch

 Do I have this type of lock? Most likely if:

  • The deadlatch is fitted on the inside of the door
  • The Key locking cylinder is on the outside of the door
  • You have a mortice lock fitted on the door as well

Most likely not if:

  • This is the only lock on your door
  • Your door is made of UPVC

Deadlatches look chunky and are often found on wooden doors but also can be found on glass panelled doors. The lock will be set on the surface of the door rather on the inside edge. When you shut the door with this type of lock, it will lock automatically. These locks are often referred to as night latches.

Click here to see what a rim automatic deadlatch lock looks like.

We hope you found this short guide helpful. If you have any questions regarding your proposal form or your insurance requirements, please get in touch by emailing info@anthonywakefield.com or call us on 01306 740555.

Please note that image links to door locks are for illustration purposes only. Anthony Wakefield & Company Ltd have no association with the source of these images and are not responsible for any misrepresentation. This article is without responsibility. For professional advice on insurance matters, please contact us.

Sources: https://www.locksmiths.co.uk


Jargon-Buster

Insurance can be confusing as it involves a lot of established law and the consequences of getting it wrong can be catastrophic. We can help you understand some common insurance jargon with this short guide.

Accidental Damage

As standard, property insurance covers sudden and unforeseen events such as fire, flood, theft, etc.

To widen the cover, you will often be given the option to pay a higher premium for accidental damage cover although some premium policies will include this as standard. This allows claims for any other accidental cause to be considered such as an item being dropped or a bath overflowing and causing water damage.

Excess

The first amount of any claim for which you are responsible before the policy will respond to a claim. For example, a claim for £1,000.00 with an excess of £500.00 would result in a settlement to you of £500.00.

Endorsements, warranties and conditions precedent

These are terms which you must follow closely to either do (or not do) something in order to reduce the risk for the insurers. Failure to follow these instructions could lead to a claim payment being reduced or refused.

Financial Conduct Authority (FCA)

This is the organisation which regulates financial services in the UK. As with all bona-fide insurance brokers, Anthony Wakefield & Company is authorised and regulated by the FCA and you can check this by searching for our reference number (307545) on the financial services register.

FLEA Cover

If a property is unoccupied, insurers will normally restrict cover to claims for Fire, Lightning, Earthquake, Explosion and Aircraft. There is no standard template for what is and isn’t covered so please ask us if you are not sure. This is the most basic level of cover for property insurance and should not be used as a long-term solution as it does not offer protection against many common risks such as escape of water, malicious damage, subsidence, heave and landslip or theft.

Insurance Premium Tax (IPT)

This is a tax levied by Her Majesty’s government for insurance placed in the United Kingdom. It is currently set at 12% for most classes with a notable exception being travel insurance which is at 20%. Unlike VAT, it cannot be reclaimed.

Listed buildings

These are buildings which have been designated as having particular historic importance and, as such, are protected against modifications or demolition in order to preserve them. Listed buildings often cost insurers more to put right in the event of damage as authentic materials and techniques must be used in their restoration.

Premium

This is the amount which you pay for your insurance. This is normally charged annually as policies run for 12 months but some insurers may offer the ability to pay by instalments to spread the cost.

Proposer / Insured / Policyholder

The proposer is what you (our client) are referred to as when you have not yet purchased a policy. When you purchase cover, you become the “insured” or the “policyholder”. This could be an individual, a partnership, a family, an association or an incorporated entity such as a charity or limited company.

Public Liability Cover

If you negligently cause damage or injury to a third party or their property, you may become legally liable for any expenses they suffer. This is where a civil court could award a payment from you to them to put things right.

Household policies will normally include this cover as standard and the cover you are offered depends on whether you insure the buildings, the contents or both. Sometimes, cover will be extended to your personal legal liability anywhere in the world.

Risk

This can refer to the likelihood of a claim occurring. For example, a property with a thatched roof represents a higher risk of fire due to the nature of the construction.

It can also refer to the thing being insured. For example, your home may be referred to as “the risk premises” or just “the risk”.

Standard Construction

This normally means that the walls of the property should be built of brick, stone or concrete and the roof should be of pitched slate or tile construction. Some insurers take different views of standard construction, so it is best to give us an accurate description. Examples of non-standard construction could include cladding on the walls or a thatched roof.

Subsidence / Heave / Landslip

This is the movement of the building due to a change in the ground underneath and is characterised by cracks in the brickwork. Subsidence claims can often take a while to settle and are normally very expensive for insurers to remedy. It is normal for insurers to apply a £1,000.00 excess for these claims and to apply special terms for properties which have previously suffered from movement.

Sum Insured

The monetary amount which you are covered for. For buildings, this should be the value to replace the building as calculated by your surveyor. For contents, this should be the full replacement value on a new-for-old basis. For collections of fine art, antiques and jewellery, this should be the value as established by an independent expert.

Unoccupied

When a property is left without an occupant during the day (or overnight) or is left insufficiently furnished for day-to-day living, it is said to be unoccupied. Home insurers will recognise that a property may be regularly unoccupied during the day for work and may be unoccupied for short periods to allow for holidays and, therefore, it is normal to allow for the property to be unoccupied for periods of around 30 consecutive days without affecting the cover.

For second homes or holiday homes, longer periods of unoccupancy may be allowed and it will be understood that the property is regularly unattended. In any case, it is important to ensure that all security is in full and effective order to minimise the risk of theft and/or malicious damage and to ensure that any heating requirements are complied with during autumn and winter months to reduce the risk of a burst pipe.

If you have any questions about your insurance policy or what insurance would be best suited to you, please get in touch by calling 01306 740555 or emailing us at info@anthonywakefield.com


Project Insurance

How would you feel if your house collapsed during a renovation project?

It’s important that homeowners engage with an insurance broker, such as Anthony Wakefield & Company, who understand renovation risks, to make sure that you are fully protected. However, most home renovators, and many home insurance brokers, have no knowledge of JCT contracts. In most cases, it is only when a homeowner needs to arrange the insurance for their home undergoing work that they uncover just exactly what is involved. Very few even notify their insurer; presuming they are covered – and it’s a big problem.

Take a look at this cautionary tale detailing a homeowner not having the correct insurance in place.

A home should never be at risk due to the lack of insurance or the wrong cover. Failure to engage experts to advise and arrange your project insurance could lead to massive costs and, indeed, liabilities.

If you’re looking at undertaking a renovation or extension project costing from £50k to £250k, working with Renovation Underwriting, we can help ensure that you and your property are fully protected.

Please contact Cyrus Wakefield on 01306 734 102 for further information or email him at: cw@anthonywakefield.com


Party Wall Insurance – What is it, do I need it, and how do I get it?

Party wall insurance, sometimes referred to as ‘Non-Negligent Insurance’, ’21.2.1 Insurance or ‘6.5.1 Insurance’ is a type of liability insurance which responds directly to a liability placed on renovators and property developers by the Party Wall Act 1996 (the Act).

The Act places what’s known as a strict liability on renovators and property developers for certain heads of structural damage sustained by neighbouring property owners as a result of the works being undertaken. The term ‘strict liability’ means that it is not necessary for the affected property owner to prove any negligence. It is sufficient that the property has sustained damage, and that this damage can be demonstrated to have arisen as a result of the works being undertaken. The relevant heads of insured damage are:

  • Collapse
  • Subsidence
  • Heave
  • Vibration
  • Weakening or removal of support
  • Lowering of groundwater

We are often asked why this cover is needed given that the contractor holds public liability insurance. The answer is that the contractor’s liability insurers will only consider damage which is as the result of the contractor’s negligence. Relying on this policy alone leaves the renovator / developer exposed to incidents of third party property damage which cannot be pinned on a specific cause, or where the relevant parties can demonstrate that there has been no negligence.

Party wall insurance is usually bought by either the renovator / developer or their contractor, and will always be issued in joint names. It should be clarified that it is not actually necessary for a liability under the Act to exist (because, for example, the at risk property is more than 3 metres away from the works, or because excavations will not go below the foundations of the neighbouring property) for the policy to operate/ ‘No liability under The Act’ is not an exclusion under this type of insurance. Similarly, just because there is no liability under The Act, it does not follow that this insurance cover would not be sensible. In all cases, the renovator / developer should consider the risk that the works pose to neighbouring structures and base their decision on whether or not to purchase this cover, and at what limit of indemnity, on that.

There are a series of exclusions, but chief amongst them are:

  • Damage which is as the result of negligence
  • Damage which could be reasonably foreseen to be inevitable.

In terms of getting this cover in place, you’ll likely need a specialist to guide you. More than any other head of cover in the contract works arena, the underwriting of this insurance is a very technical operation, and it relies on quality information. We would advise the following:

  • Have the proposal form completed by someone on the professional team with intimate knowledge of the structural aspects of the development
  • Answer questions on the proposal form directly. Responses such as ‘refer to drawings’ are not going to be acceptable. The purpose of the form is to summarise complex technical information, not simply to refer to it
  • Be ready to provide supporting documentation such as plans and drawings, geotechnical reports and method statements
  • Whatever you do, do not commence structural works until the policy is in place. Insurers are unlikely to grant retro-active cover in all but extremely limited circumstances

Working with Renovation Underwriting, we can discuss your options for Party Wall Insurance cover. Please contact Cyrus Wakefield on 01306 734 102 for further information or email him at: cw@anthonywakefield.com


Valuations

When purchasing insurance, you are likely to be asked how much cover you need. When insuring your home, you need to make sure that you have enough cover for the maximum amount which could be claimed. So, how can you make sure that you have reached the correct figures?

What are valuations?

By obtaining professional valuations, you can take on independent professional advice. But does this apply to everyone?

If your insurance requirements are for buildings cover less than £1m and contents cover less than £100k with few valuables, insurers will often offer blanket cover where you purchase a policy that allows for a maximum figure beyond your requirements.

However, if your insurance requirements are greater than these blanket policies or if you have a large collection of jewellery and/or art, professional valuations may be required. Furthermore, individual items of high value may need to be supported by a professional valuation even for blanket policies.

Examples of valuations

For jewellery and watches, the value should be established by a professional jeweller. Most high street jewellers will be able to produce a valuation report and will often charge a flat rate per item or a percentage of the value of each item. Some jewellers even offer online valuations where you can send a copy of the original purchase invoice and details of the item along with photographs.

The value of jewellery and watches is volatile due to market pressures but, at the time of recording, their value has been increasing. In times of economic slowdown, investors put their faith in tangible items such as watches and the price of precious metals increases.

For art and antiques, specialist valuations from a qualified professional are essential. These are often undertaken during a home visit where the valuer will value the entire collection and then produce a report which can be provided to the client and their insurer.

As with jewellery, the value of art and antiques is subject to market conditions. Popular artist, Banksy’s, work has soared in value as his profile has been raised. Consequently, prints which were purchased for less than a thousand pounds can now be worth tens of thousands. Conversely, the value of brown furniture has plummeted as demand has decreased. Home design no longer favours these antique items and this has led to an oversupply.

More information

For more information about valuations with regards to your insurance policy, please email info@anthonywakefield.com. To learn why valuations are important, please read our previous post about underinsurance.


Underinsurance – Buy Cheap, Buy Twice.

Customers who purchase insurance policies can become confused and frustrated if their claim is not met in full. A common misconception is that insurers are trying to save money whereas often the issue arises out of policyholders trying to save money with this common mistake.

Imagine that you insure your home for £500k, but to rebuild it following a fire, it would actually cost £750k. What happens then?

What is it?

Underinsurance is when the value at risk exceeds the sum insured. Basically, it is when you don’t have enough cover. It does not apply in every scenario but is particularly relevant to property insurance.

Where underinsurance can arise

So how much cover do you need? Well, this depends. If you are trying to insure the buildings of a house or other property, this is usually the cost to rebuild the structure plus an allowance for clearing the site following damage beyond repair and an allowance for professional fees for architects and surveyors. Buildings which are listed by Historic England, Historic Environment Scotland, Cadw or the Northern Ireland Environment Agency have unique requirements when repairs are required, and these involve the use of specialist techniques and materials which can increase the cost to reinstate.

If you are insuring your home or business contents, you will normally need to insure for the value to replace all the contents on a new for old basis. If your tv was damaged or stolen, you would expect to have it replaced with a new unit of similar specification.

For jewellery, values are often based on the opinion of a professional. For items such as rings and necklaces which can be remade if lost, stolen or damaged beyond repair, the value will be in the stones and metals used. For watches, there can be a waiting list, and this can push the value of limited-edition models way beyond the manufacturer’s recommended retail price. Where watches are purchased as an investment, it is important to insure for the value which could be otherwise lost where there is a difference between the retail price and the market value.

Reducing the risk

To ensure that you minimise the risk of underinsurance, you should review your policy on a regular basis. Most policies renew annually so it’s a good time to check that everything is still correct rather than just paying the renewal premium.

Furthermore, you should tell your insurer if something changes. If you purchase additional contents or stock, you might need to increase your cover during the policy term. Similarly, any building works or home improvements such as solar panels can increase the cost of rebuilding a property.

More information

For more information on how to get the correct insurance with us, please visit www.anthonywakefield.com or call us on 01306 740555.


Fibre Digital Migration And The Impact On Your Insurance Policy

The mandatory rollout of the new fibre based digital phone network intended to complete in 2025 is progressing. The sale of analogue lines will cease in September 2023 and new alarm systems will now be installed over an IP-digital network.

Most analogue based alarm transmission systems used for intruder and fire alarm systems may fail to operate correctly after this transition. Where remote signalling for alarm systems is a condition of insurance policy cover, the migration could leave you accidentally in breach of your policy conditions.

Here are a few tips:

In order to avoid any interruption to your policy cover, it is advisable that clients with remote signalling alarm systems should approach their system maintenance providers to establish if existing alarm transmission systems will work on the new fibre network ahead of the switchover.

If your alarm system is not compatible, you may need to look to get an alternative that will not compromise the signal transmission.

A monitored alarm system can act as a deterrent to thieves, reducing the risk of a burglary. In some cases, insurers may require a monitored alarm to be installed and maintained under contract by an accredited installer if the home has a significant collection of art, antiques and/or jewellery. While physical protections (such as locks and safes) are useful, having an effective monitored alarm set while the property is unattended will maximise the possibility that the police can respond and catch the thieves in the act.

If your insurance policy is coming up for renewal or you would like to speak with us about an existing policy, please call 01306 740555 or email info@anthonywakefield.com alternatively you can visit our website www.anthonywakefield.com to see what insurance products we offer.

This guidance is provided for information purposes and is general and educational in nature and does not constitute legal advice. You are free to choose whether or not to use it and it should not be considered a substitute for seeking professional help in specific circumstances. Accordingly, Anthony Wakefield & Company Ltd and its subsidiaries shall not be liable for any losses, damages, charges or expenses, whether direct, indirect, or consequential and howsoever arising, that you suffer or incur as a result of or in connection with your use or reliance on the information provided in this guidance except for those which cannot be excluded by law. Where this guidance contains links to other sites and resources provided by third parties, these links are provided for your information only. Anthony Wakefield & Company Ltd is not responsible for the contents of those sites or resources. You acknowledge that over time the information provided in this guidance may become out of date and may not constitute best market practice.

 


Insuring Listed Property – Renovation Works

A property in the course of renovation is a tricky proposition to insure at the best of times, but if the structure is listed, this presents an additional challenge. Insurers expect claims to cost more. The same incident occurring at an unlisted and a listed property will see costs multiply in the case of the listed structure, particularly at the higher grades.

During the works phase, renovators are often tempted to skimp on insurance and bodge together a collection of policies which fail to fully cover the risk. In a claim situation, those people tend to find that not opting for specialist contract works cover was a very expensive mistake. This becomes particularly true when the property is listed because the owner does not generally have the freedom to reinstate using cheaper methods and materials. A bespoke contract works package ensures that there are no gaps in cover, so listed property owners can rest easy as far as the conservation authorities are concerned.

It is always true that the sum insured should be correct, but returning to the point that listed building owners generally don’t have the freedom to select cheap methods and materials, any under-insurance can prove very costly. It is always worthwhile considering a professional valuation. We can provide you with a referral if you need one.

It will come as no surprise that listed structures attract a premium loading. This can be mitigated by ensuring that the project risk management programme is on point, and that there is documentary evidence of this. The property market generally is in the hard part of the insurance cycle, and capacity has shrunk significantly. Now more than ever, insurers are fussy. If the risk management around a listed structure project is not of the highest order, it may even become uninsurable.

Working with Renovation Underwriting, we can discuss your options on insuring your listed property. Please contact Cyrus Wakefield on 01306 734 102 for further information or email him at: cw@anthonywakefield.com


Escape Of Water – Its Causes, Effects, And The Mitigation Strategies

Traditionally the expression ‘Escape of Water’ has not struck quite the same level of fear into the heart of an underwriter  than the word ‘Fire’. However, this peril is actually the single biggest cause of claims under property policies. In 2018, 27% of all claims submitted listed Escape of Water as the proximate cause. In addition to the high frequency nature of these claims, the impact is also often very high. After Fire, Escape of Water is known to generate the highest claim payouts in large loss situations.

There is no doubt that Escape of Water is a peril which is now very much on the radar amongst insurers, and this has become increasingly true as the property market continues to harden and capacity shrinks. The result as far as policyholders are concerned is that the cover is harder to get, it can be more expensive, and its provision may be dependent on additional subjectivities.

Causes:

Escape of Water occurs primarily when a breach occurs in a plumbing installation, but can also be caused by leaking appliances and poor seals around shower trays and baths. As a general rule of thumb, leaking appliances and poor seals will not generate huge claims, whereas burst pipes do have a significant potential to cause very large amounts of damage. This is particularly true when properties are unoccupied, and when the plumbing elements in question are fitted behind walls. A lack of accessibility and visibility can greatly increase the time it takes to identify that water is escaping. Pipes will burst for a number of reasons, but the primary causes are either breaches as a consequence of wear and tear to old installations, or a physical bursting of the pipe caused by the expansion of water which freezes within a confined space.

Effects:

After fire, water has the greatest potential to damage the physical structure of buildings and the contents within them. There can be significant damage to decorative finishes, electrics and contents almost immediately, there can be further irreparable damage occurring over durations measured in hours and days (for example, the blowing of a parquet floor submerged in pooling water), and finally, there can be long term issues around the presence of damp if structures are not dried properly. These physical realities can be incredibly expensive to rectify, but more than that, the effect of a large escape of water can be emotionally devastating for a property owner, and the time and effort required to reinstate can be huge. It is fair to say that having a good quality insurance policy which will pay out in an escape of water situation is going to offer a degree of comfort, but there are so many reasons beyond the smooth operation of an insurance policy to seek to mitigate risk. The mental toll and the disruption to life of a big escape of water is a huge cost which rarely gets factored into insurance procurement processes.

The Mitigation Strategies:

New purchasers and renovators would be well advised to commission a full structural survey within which, an analysis of the existing plumbing situation would be advisable. The first step to any risk management and mitigation strategy is to understand the risk you are faced with.

Renovators in particular will increasingly find themselves being asked to supply ‘water management plans’ as part of the pack supporting their application for insurance cover. Insurers have always been hot on obtaining fire risk management plans. Escape of Water is now getting the same treatment. The purpose of these documents is to identify, assess and mitigate risk. It is worth re-stressing that, whilst a water management plan will often be crucial to ensuring the smooth operation of insurance cover, it is actually just basic common sense to reduce the risk of incidents which come with so much cost beyond the purely financial.

Renovators might want to consider locating water storage vessels on lower floors if it is practicable to so. In the event of a breach, the upper floors would avoid the effects of the escaping water.

Renovators should consider building their water management programme around the best practice detailed in the Construction Insurance Risk Engineer’s Group’s (CIREG) “Managing Escape of Water Risk on Construction Sites” document. This guidance considers escape of water from design stage all the way to testing and commissioning. Any confirmation of adherence to this framework would be viewed very favourably by the insurer.

In unoccupancy situations it will almost always be a requirement that water installations are drained down, and the water supply isolated at the mains entry point. This is particularly true over the winter months when the water within pipes is more likely to freeze and split the pipe. Insurers will often make an exception where the water is required to maintain a level of heat within the system which would prevent freezing.

Commercial risks will also have to consider not only heating systems, but also sprinkler systems. In the sense that a sprinkler system is just another closed water system, the same strategies you’d apply to pipes would apply to sprinkler systems.

Perhaps the most effective tool in the box when it comes to the management of the escape of water risk is what we would call the leak detection/suppression system. There are now various products on the market ranging in cost and functionality which will, to a greater or lesser extent, manage and reduce the risk of escape of water within a property. These systems, generally fitted to the mains riser, can offer simple detect and alert functionality (where changes in flow, pressure or humidity would seem to indicate a breach), through to the ability to actually shut down water systems and isolate parts of water systems automatically following escape detections. Such systems can often also be programmed to take account of unusual water flows (perhaps when a large number of visitors are present and placing increasing demands on the water system) so that the system is not shutting off when it shouldn’t be. Similarly, you might programme the system to shut down immediately if any flow is detected in situations where the property was unoccupied.

These leak management and suppression systems represent a fantastic risk feature as far as insurers are concerned, and will likely result in a discount on the insurance premium. They are generally pretty easy to source and fit as well. A requirement to have such a system in place is increasingly likely to be an insurance requirement, particularly in the high net worth and commercial sectors.

When it comes to escape of water, a small investment in time and money now can save a huge amount of cost and pain later. Working with Renovation Underwriting, we can discuss your options, and any potential obligations if you are in any way concerned. Please contact Cyrus Wakefield on 01306 734 102 for further information.


Renovating Thatched Properties: What You Need To Know

It will come as no surprise to the owners of thatched properties that finding comprehensive and effective insurance cover during a renovation phase is challenging. But whilst the vast majority of the specialist contract works insurance providers will decline to insure such a risk, we do have access to a market who will provide All Risks cover for thatched properties undergoing works.

As you would expect, the insurance of such properties is dependent on heavy underwriting, and some fairly stringent subjectivities. Renovators can also expect to pay a significant premium for the cover for exactly the same reasons as they are required to pay higher premiums in the standard property insurance market. It is obvious, but it bears repeating. Thatched properties pose a greatly enhanced fire risk, and when such properties do catch on fire, they are frequently completely engulfed, leading to more costly claims.

Before our market will offer a quotation to insure a thatched property undergoing works, they will need to be completely convinced of the following:

  • Project management is being undertaken by experienced and qualified individuals
  • Contractors are of high quality, and are familiar with the additional risks a thatched property presents
  • There has been a thorough risk assessment undertaken in respect of Fire. This risk needs to have been identified, assessed and managed, and this process needs to have been well documented
  • The project has been budgeted and planned, with a relatively firm end date. Whilst we appreciate that projects do overrun, our markets will not consider projects where the planning is vague
  • There needs to be adequate water supplies on site to tackle a major blaze
  • The risk needs to be otherwise ‘clean’, which is to say that there are not additional enhanced risk factors present which tip the risk out of appetite. For example, if there was a poor history in relation to theft, or if it was felt that the project management function was being taken on by someone without the requisite experience, the combination of these factors and the enhanced fire risk might mean that the total risk presented exceeds the insurer’s willingness to accept it.

To ensure the best chance of achieving a reasonable quotation for cover during a works phase, it is therefore essential that the proposer is able to demonstrate stringent risk management procedures, particularly in relation to fire, and that in the broader sense, the project will be managed professionally.

Quotations for this cover will invariably include the following subjectivities:

  • Where thatch replacement is occurring, confirmation that the provisions of the Dorset Model (a best practice guide for works being undertaken to thatched properties) will be adhered to, or alternatively, that an alternative model is being utilised which is at least equivalent, and which is documented
  • Compliance with the content of the UK TFA 16 Steps Guide. This is a best practice guide issued by the Timber Frame Association. Whilst this does not relate specifically to thatch, its provisions represent a very good framework for the management of fire risk, and our markets will require it as part of the insured’s risk management obligations. Again, if the renovator cannot confirm adherence to the Guide, they will need to provide evidence that they are applying a set of risk management steps which are at least equivalent, and which are documented
  • An increased excess in respect of the Fire peril

They might also include:

  • A requirement to survey
  • A requirement that water-storage tank capable of storing several thousand litres of water is present on site. This would be imposed when the proposer could not confirm that there are adequate water supplies on site already (a pond, a swimming pool, a river, a hydrant accessible by the fire brigade)
  • A requirement to supply a full scope of works document and a gantt chart (primarily to demonstrate that the project is well planned with a defined budget and a start and end date)

In conclusion, peace of mind insurance for thatched properties during the works phase is achievable, but it does require a certain commitment from the renovator around stringent risk management and broader project management professionalism. If the insurers get the sense that one or both of these factors are not present, they will have no hesitation at all in declining to offer a quotation.

Working with Renovation Underwriting, we can provide cover for thatched properties for our existing clients or on new projects. Contact Cyrus Wakefield on 01306 734 102 for details.


Party Wall Insurance – What Is It & When is this actually required?

Renovators can be forgiven for failing to appreciate the importance of party wall insurance. We all tend to have a basic understanding of how liability to third parties works so it is often assumed that the contractor’s liability policy will deal with any party wall issues which arise. This is true to an extent, but for the contractor’s liability policy to operate, the third party must demonstrate that the contractor has been negligent in some way. Standard liability policies only operate in the presence of negligence.

The Party Wall Act imposes what is known as a ‘strict liability’ on those undertaking works. In plain English this means that so long as the third party can demonstrate that they have suffered structural damage, and that the damage stems from the works being undertaken by the renovator, then regardless of whether or not anyone has actually been negligent, the renovator is liable to reinstate the damage. If we follow this to its natural conclusion then we can see that the contractor’s liability policy is not going to cover off the full scope of the renovator’s liability. It will only cover damage which results from negligence and not damage which has occurred, but is nobody’s fault.

Specialists in the contract works insurance arena will be able to identify when a ‘non-negligent party wall liability’ exposure exists, and offer an insurance policy to cover off this exposure.

To further confuse matters, renovators may conclude that party wall insurance is not actually required in respect of structures which are not attached, or even proximate to third party property. This may not be the case for 2 reasons:

  • Third party property which is not attached to the contract site, but is sufficiently proximate to be at risk may still be protected by the provisions of the Act. If the third party property is within 3 metres, the Act will almost certainly apply, and even if it is more distant, it may still be at risk from the works
  • A good quality party wall policy will protect areas of the contract site not being worked on. So, if contractors are working on the front elevation and, through no fault of their own, there is movement which affects the rear elevation, a party wall policy would operate to reinstate this damage whereas the contractor’s liability policy would not

If a renovator is insuring the structure with a standard property insurer, then our advice where they are undertaking significant structural works would be that a party wall policy would have some value. The simple truth is that most, if not all standard property insurers will exclude damage to the existing structure caused by the contractor whether this was as a result of negligence or not. A party wall policy would therefore step in where areas of the structure not being worked on were damaged as a result of the works, but not as a result of the contractor’s negligence.

Specialist contract works packages tend to provide direct cover for accidental damage to the structure being worked on whether this is the result of negligence or not. If the renovator has taken out such a package, they will find that there is actually no need for party wall insurance in respect of the structure being worked on, but it must be understood that this accidental damage coverage does not extend to third party property. The contract works package will do the job of a party wall insurance policy as far as the renovator’s property is concerned, but it will do no such thing in respect of neighbouring property. To ensure neighbouring property is fully protected, the renovator must ensure that the contractor has adequate public liability insurance for negligent damage, and that there is a party wall policy in place for structural damage which is not the result of anyone’s negligence.

We’d just like to hammer home a point we’ve already made above. Renovators should be aware that there needn’t be a physical party wall for liability under the Party Wall Act to exist, and for party wall insurance to be a sensible option. If the works are occurring within a certain distance from neighbouring structures, even if they are detached, party wall notices may still need to be served, and the risk of structural damage to neighbouring property can still exist. Where there is risk of damage to third party structures stemming from the works, even if no liability exists under the Act, renovators can still benefit from the peace of mind such a policy provides.

Working with Renovation Underwriting, we can provide cover for building and refurbishment works for our existing clients or on new projects. Contact Cyrus Wakefield on 01306 740555 for details.


Time to Extend ?
“The perennial question do I move house to gain more space or should I extend my home?” can be an exciting prospect for some homeowners but equally it can prove to be an expensive and less than satisfying conundrum to deal with.

Having some building work done is notoriously stressful and disruptive for your home and your daily routine. Often large sums are involved and lots can go wrong – botched home improvement work is estimated to cost home-owners over £1.7 billion every year. There are over 110,000 complaints about building work notified to the Department of Trade & Industry each year and of course that doesn’t take into account the ones resolved in other ways.

So how do we find a good and reliable Builder?

The best way is by recommendation. Ask if the builder started and finished on time, kept the site tidy, cleared up at the end, struck to the agreed price and overall did a good job of work. Remember, however, some problems take years to become evident. By then the builder may have ‘vanished’. I remember well a small builder working in an affluent part of South West London some years ago who carried out a number of well executed projects, had a large order book for which deposits were paid, and then swiftly left the country.

You can find builders in your area who are registered with the Federation of Master Builders from their website. However, while standards for joining the Federation are high, it does not inspect the work of members. Beware – some unscrupulous cowboy builders put the Federation’s logo on their letterhead even though they are not members. Request to see their certificate of membership.

You can also look for a builder under the Quality Mark scheme (0845 300 8040), a government-backed register with details of more than 500 firms. Finally you might try Which Local, which has been set up by the Consumers Association to allow satisfied customers to recommend companies which have done good work for them.

Getting a price

The Old Adage “Don’t rush in” is most apt when finding someone. It’s always tempt-ing to excitedly rush into a project. But at the least obtain three quotations. The Building Cost Information Service will give you an idea of how much a job should cost. Don’t necessarily go for the cheapest quote; take into account the answers to your questions.

Planning Permission needed or Permitted development

Find out if you need planning permission or if building regulations apply to your job. If it qualifies as “building work”’, which includes everything from building an extension down to installing a new window or boiler, you are obliged to have it inspected and certified by your local council (which will require a fee).

Planning permission covers larger projects and for this you need to apply to your local council planning department, providing plans. The department responsible at your local council will either use their in-house Building Control, or you will be directed to an independent practitioner, and they will tell you all you need to know. You will need the certificates when you come to sell your house as the Purchaser’s solicitor will want to see them as part of the conveyancing process.

All of this may seem daunting and a mine field to negotiate, and it can on more complex projects be more prudent to hire an architect or Chartered surveyor to help you plan the job and then oversee it. Typically, fees of 10-13% of the value of the work are charged, but they can save you money by knowing that you have chosen the right builder, that costs are checked and quantified. By thinking of the end product, you can make sure that you can get good quality work.

Regardless of the self-imagining of a project or use of a professional to manage the project, here are the key questions to ask:

  • Could you give me the names of some people for whom you have done work so I can contact them?

Make sure you speak to them in case the builder has invented them.
Ask to see the work and forget about anyone who won’t show you work they have done.

Ask to see some older work as well as a recent job since there will have been more time for faults to become apparent.

  • Have you done a job like mine?

It’s better if the builder has done something at least reasonably similar or he could be learning how to do it at your expense.

  • How long have you been in business?

A builder can demonstrate this by producing records or other paperwork like bank statements or contracts.

  • Do you operate from a fixed address?

It’s a bad sign if they don’t. While an individual tradesman can operate from home, a builder needs space to store equipment and supplies. A home ad-dress is all right as an office address but a builder needs premises some-where.

  • Can you provide trade references?

References from a supplier about a builder’s credit facilities and payment are a good indication of financial stability and management. Also, check how long he has been with his current bank – beware someone who keeps changing his bank as this can indicate financial problems.

  • Are you registered for VAT?

Generally look for a builder who is VAT registered. The VAT threshold is currently £64,000 and someone with a turnover below that cannot be doing very much work.

If someone offers to waive VAT if you pay cash, beware. Tax avoidance is not the sign of the honest type you want and it puts you in a weak position in the event of a dispute.

  • Do you give a written estimate and quotation?

It’s essential. Never accept a verbal assurance that it will cost “about £10,000”. It’s important to distinguish between an estimate and a quotation.

An estimate is only an estimate, it has no binding force.
A quotation is an undertaking to do the job for a stated price.

You can move from an estimate to a quotation when you have established exactly what is to be done. You may want to change a few things to save money after seeing the estimate.

The final detailed quotation should include all the work to be done, date of completion, security and safety, catering and toilet arrangements, disposal of rubbish, water and power supplies, hours of working and so on. But better still, ask for a written contract.

You can download a standard one from the Federation of Master Builders website (www.fmb.org.uk). Once the builder has signed it, you will be much better covered.

  • When can you start?

Cross-examine your prospective builders on how realistic proposed start dates really are. Don’t push for an early start if this is unrealistic. On larger projects ask for a timetable so you can see if the job is slipping behind.

  • How many jobs do you have on at the moment?

You will need to relate this to the size of his workforce. A small workforce and a lot of projects could mean he is overstretched. If this means excessive use of casual labour or sub-contractors it could spell trouble – see below.

  • Do you have insurance cover?

Your builder is legally obliged to have both public and employers liability insurance and make sure you see the relevant certificates of insurance. He should have at least £2 million cover. He should also have other insurance to cover other problems which may arise – again, ask to see his certificate.

  • Do you offer a guarantee of your work?

It’s much better if he does although it can be valueless in practice if he goes out of business. The far better solution to ensure you are protected is to con-tact your insurance broker, and purchase a 10-year warranty to cover building work. While this means you will have to bear the cost of insurance yourself, you know you are covered.

  • Have you had any claims against you under Health & Safety Legislation?

Work on a building site is regulated by Health & Safety Legislation which covers things like project and risk management, maintenance of equipment, standards of work, safety procedures and the like. You are yourself liable for certain facets of a job until you can show that you have definitely devolved responsibility from your builder. Ask him how he complies with the legislation – as well as any claims against him.

As a supplementary question, ask if the Construction (Design and Management) Regulations 2015 or CDM for short, applies. A project is notifiable for CDM when: The construction is scheduled to last longer than 30 working days, and it will have more than 20 workers working at the same time at any point in the building project.

  • Do you expect a deposit?

If he does, forget about him. The builder should be in sufficiently good financial shape to purchase supplies without needing your cash up-front to do it. The only exception would be where some rare kind of very expensive initial purchase has to be made, for instance bespoke glass works.

  • How do and when do we pay?

If the job is big enough – for example, if it lasts four weeks or more – then agree stage payments which should be precisely defined.

Agree what percentage of the total bill you will retain until you can be sure that all the work is satisfactory, which should be 10-20%. If you pay in cash, you will be in a very weak position in the event of any dispute. It is better to pay by bank transfer, cheque or credit card. If you can use the last, then the card provider will be jointly liable for payment which may help you in the event of a dispute. Check that your builder will accept payment by credit card. Many do not – understandably, because of the fees charged by the card.

Using a professional to administer the project will mean that works are valued and the amount of each stage payment is quantified.

  • How do you deal with changes to the specification?

Any changes should be put in writing and, if there is a knock-on effect on the costs and finish date, these should be put in writing too as an addition to the quotation or contract. Please do not venture onto a project thinking you can easily change your mind as you go along – most changes of mind will cost you money and cause delay.

Variations on a project are the prime cause for going over budget, so when planning a project have you allowed a contingency? Some cost increase may be unavoidable, such as deep foundations being required and cost of materials escalating. In the aftermath of the Grenfell Tower fire the price for insulation materials went skyward, given the shortage of certified products available.

How to measure progress of the project, easy if you are living in the building being altered or extended.

Stipulate that you want to turn up regularly to inspect work and come when-ever any particularly important element of the work is underway. Drop in un-expectedly from time to time – is the builder happy with that?

At certain times given the nature of works, such as lifting heavy steel joists into place, or when deep foundations are being dug, Health and Safety issues may need to be observed, but generally it shouldn’t be an issue.

Also ask when particular tasks are to be done which involve things like pipes, wiring or damp-proof membranes being covered up and make sure all is well before they disappear. Dropping in unannounced from time to time may not catch anyone out but the knowledge that you might should at least be a deterrent to a bit of cheating. If a builder seems negative about this, don’t employ him. You want someone who is proud of his work, and will also be pleased to have the opportunity to sort out minor alterations or challenges which crop up.

  • Specialist advice, and how to get the help needed?

If help will be required from a specialist like a structural engineer, to design roofs, calculate the size of lintels required for openings and removal of walls to form, for instance, open plan accommodation, or a drainage consultant or central heating engineer or Independent Building Control, you must ask your builder if he has access to someone, how he proposes to use them and ex-actly where responsibility lies for their contribution.

This neatly brings us on to what may be considered one of the most important questions when planning your project.

  • Always ask your prospective Builder if they have trades and skills in-house with an experienced and established team or do they hire casual labour and sub-contractors?

It is much better if your builder has an established team. He may find it difficult to impose his own standards on people he has never seen before, like migrant tradesmen. If he is starting off someone new he should supervise him long enough to confirm his competence before leaving the site. Additionally, if a builder needs to hire sub-contractors – e.g. for plumbing, electrical, central heating – these should be tradespeople whose work he knows well.

  • Insurance cover

Make sure you have your own Public Liability insurance in case something affects neighbours or passers-by. In the first instance call your broker and en-sure your insurance company are informed about the proposed building work. Having builders in may affect the terms of your Buildings and Contents policy.

  • What to do if something goes wrong?

Speak to your builder as soon as you spot something you don’t like the look of. The longer you leave it, the more difficult it will become to sort things out.

If you can’t resolve matters, you can seek help from the Federation of Master Builders or the Quality Mark scheme which run arbitration services. Otherwise, you will need to engage a Chartered Surveyor, which will send costs shooting up – and could leave you living in a building site for months if matters aren’t promptly resolved.

For further advice please contact our team of Chartered Surveyors and Architects:

Arbiter Adjusters
10 Kimbers
Petersfield
Hampshire
GU32 2JL

info@arbiteradjusters.com


It’s an ill wind…… How the world’s windstorm losses may affect your insurance costs in 2018

2017 has been the worst year in monetary terms for windstorm damage since 2005. That was the year when Hurricane Katrina caused so much devastation.

In 2017 the insurance costs of Hurricanes Irma and Maria alone in the United States are estimated to exceed US$100 billion. In total more than US$ 350 billion of windstorm losses will be paid by insurers over the next two years.

There is no question that most insurers will be able to absorb these losses, because there was excess catastrophe reinsurance capacity available this year.

However, there is only one way for insurers and reinsurers to pay their claims and to reserve for future losses and that is to spread premium increases across the whole of their insurance book. While the bulk of the increases will fall in those areas of the world that have been worst affected by the storms, premiums for general business elsewhere will have to rise to persuade insurers to continue to provide cover for risks where the returns on capital have historically been small or negative.

Motor business is always a soft target, because without it we cannot drive our cars. But other forms of personal and commercial insurance, where insurance companies have been scrambling over themselves to provide as low premiums as they can, have effectively been subsidised by the past profits of catastrophe insurance.

Early estimates are that most premiums will rise next year by between 10% and 15% and for some budget policies the increases are likely to be more.

Comparison sites are largely geared towards offering clients the best price. Some insurers are likely to cut back on the benefits of their policies in order to continue to appear competitive.

When thinking about renewing with your existing insurer or choosing a different policy at your next renewal, please do not simply concentrate on what it will cost you, but on how adequate the cover will be for your needs. A good insurance broker will advise you how to get the best value from your insurance policy and give you quality protection as well.

 


Insurance Premium Tax v Value Added Tax for insurance

Next June Insurance Premium Tax is due to rise from 10% to 12%. It already stands at 20% on Travel policies.

Is it now time to consider scrapping Insurance Premium Tax altogether and replacing it with VAT, as applies to most other services?

Rather than increase everyone’s premiums this could in fact lower them!

At present insurance providers cannot recover VAT, so every claim that is paid costs insurers 20% more than it should. Insurers cannot recover VAT on their overheads, unless they have some other source of income that is VAT registered and even then they would have to prove that their costs directly relate to that area of their business.

If claims were to cost less to insurers and other overheads reduced they would reflect these in their premiums. At present customers have to bear the inherent VAT costs plus the Insurance Premium Tax.

We have seen Insurance Premium Tax creep up steadily with spurious reasoning for its increase. Prior to BREXIT it seemed logical to equate this tax to similar ones on the Continent, but now this reasoning is redundant.

Comments, please!


Insurance Premium Tax

Insurance Premium Tax is yet another tax that has to be paid with little or no benefit for the people that pay it! Originally set at 5%, by small steps it has been increased until, as from 1st October 2016, it now stands at 10% of all general insurance premiums (apart from Travel and some other specialist covers where it is 20%), including alterations and additions.

This makes it all the more important for you to ensure that you are insuring your home or business for the correct amount. Buildings insurance needs to take into consideration the rebuilding cost of the property, not the commonly held misconception that it should be the resale price.

Our recommended professional valuation consultants can give you the peace of mind that you need by assessing your precise insurance requirements and also recommend improvements to your risk protections that will save you money on your insurance costs.

They can also assist you with Contents and Fine Art valuations.

Call 01306 734105 for further details.