Get adequate insurance to keep everything in the garden rosy
NEXT WEEK’S RHS Chelsea Flower Show puts the spotlight on the nation’s favourite hobby, gardening. Yet, amazingly, far too few gardens and the adjoining property are adequately protected if there should be a claim.
A home is invariably your largest investment. Insuring such a major asset is important and to ignore key aspects could leave you significantly out of pocket.
Disregard the market value of a home for buildings insurance purposes. It is the rebuilding cost that you are insuring without the land value. Ensure fixtures and fittings are included and – often vitally excluded – the true replacement cost of the garden.
To obtain the rebuild cost, ask a chartered surveyor who can make a calculation based on the specific property. As a rough and ready guide, the Association of British Insurers offers a rebuild cost calculator (abi.bcis.co.uk).
Some insurers work on the basis of the type of property (such as terraced or bungalow) and number of rooms. Often a blanket sum is offered, such as Churchill which raised its level to £1m last November.
One way to reduce the premium is to accept a higher excess, which means you pay the first part of any claim. Yet since buildings cover is relatively inexpensive and as claims can be high, it may be a false economy.
If structural changes are made, it is vital to inform your insurer as otherwise the policy could be invalidated. In startling research, the broker Insurance Tailors discovered that only five per cent of those carrying out such work had advised the insurance company.
In some cases, such as creating a basement, specialist cover will be required.
Check if accidental damage – such as to pipes and cables – is given as standard or an option which ought to be taken. A leaking pipe can spill 2,000 gallons of water a day.
If cracks, perhaps the early signs of subsidence, are seen, contact your insurer and instruct a chartered surveyor with experience. The usual way to consider this is to establish crack monitoring before any necessary repairs can be carried out.
Sinkholes, which has caused a problem in Ripon in the last year, is usually treated as subsidence with a typical claim taking 12-15 months to resolve.
Tree roots seeking water and other nutrients are a major cause of subsidence. Before planting any tree, check the distance that it may grow in relation to your home.
The essence of insurance is to reinstate to the position before any claim arose. Keep values up to date and maintain a good record.
This may not be easy for a garden. Whilst a jeweller can value jewellery and a recognised antiques specialist cover antiques, gardens may require more than one qualification. An arborist who can identify species and value on the basis of maturity should be considered as well as a landscape architect. Reports from such professionals will enable the correct valuation to be submitted to an insurer. Many overlook the replacement price of trees and plants. A pocket handkerchief tree may cost only £90-£100 when bought as a four-year-old from a garden centre but at maturity when 20-25 years old and 6m tall with 4m spread would cost £3,500, say Wykeham Mature Plants of Scarborough (01723 862406).
Similarly, a yellow-leafed honey-locus tree might be just £40-£60 initially but grow to 9m tall and 4.5m spread by 20 years and cost £3,500 from Wykeham to replace.
Add installation costs which may require a crane for a large replacement tree or one fitting into a difficult space.
By the time other items in the garden are added, it is easy to see how a mature one may need to be insured for over £20,000.
Lloyds Bank says over 500,000 thefts from outside the home were recorded last year. Yet it says that 44 per cent of homeowners have no home cover or are unsure if their outdoor contents is covered.
Flooding and storm damage in December and January have caused millions of pounds of claims. Insurers expect properties to be well maintained and reasonable protection to be in place. This would typically mean installing non-return valves on water pipes and placing electric sockets high up walls.
A new cross subsidy to help homeowners with a high risk of flooding comes into effect shortly. The additional premium of around £10.50 will be charged on all residential buildings policies.
Properties built since 2009, buy-to-let and those in the top council tax bracket are excluded. For help on locating the right policy, contact the British Insurance Brokers’ Association.
The UK’s largest friendly society, LV=, says the main claims are for escape of water (24 per cent), weather damage (24 per cent), theft (14 per cent), fire (13 per cent), other domestic claims (12 per cent), accidental damage (nine per cent) and subsidence (four per cent).
Direct Line reveal that the major garden claims last year were for walls, followed by trees, lighting, hot tub, shrubs, water features, furniture, pergola, plants and statues. Two areas that may not have been considered are fracking and sinkholes. Check that your insurer accepts fracking as part of standard cover as some US insurers exclude it.
In Texas, compensation has been paid to homeowners for methane gas in their tap water.
Forecasts suggest that 30 per cent of the UK may be suitable for fracking where water and chemicals are pressure-pumped to break up the rock. Residents in Lancashire have reported a small earthquake from such work.
Imagine you are trying to gain entry. Check the policy for lock requirements and ensure that all windows are properly secured with key-operated locks and that external doors have five-lever mortise deadlocks, multi-point locking devices or at least two security locks.
If a flooding or another calamity should occur, ask what arrangements the insurer will make. Immediate alternative accommodation should be funded with many imposing a fixed monetary limit or – with better insurers – a time limit, such as up to two years.
At renewal, regardless of whether any claim has been made in the past 12 months, it is worth comparing premiums and policy details. Following a claim, do not be surprised if the next premium rises by 10-15 per cent.
Too frequently, insurers rely on inertia and give introductory discounts to newcomers but not to existing customers. There may be a no claims discount scheme but not publicised.
When looking at alternative insurers, use comparison sites (notably confused.com and moneysupermarket.com) but check those who are not signed up (such as Aviva, and Direct Line). Many offer attractive discounts for buying online, such as 20 per cent off with John Lewis.