10 buildings and contents insurance mistakes to avoid
Being underinsured and not realising what the insurer won’t pay out for are two common mistakes people make with their home insurance. We explain why, and how else to avoid jeopardising future claims.
Home insurance policies vary so widely that making assumptions about what you’re covered for can be a risky business. The Financial Ombudsman Service (FOS), which helps settle consumer complaints, often deals with cases where people don’t have the right insurance in place, only realising this when their claim is declined.
So it pays to read the product information and ask your insurer if you have any questions before you buy. And it might also help to know other common buildings and contents insurance mistakes, so you can avoid making them.
Assuming you’re covered for accidental damage
Fewer than one in five home insurance policies automatically cover you for accidental damage, which is when you or someone else unintentionally and unexpectedly damages your building or belongings. That could be putting your foot through a ceiling, leaving the bath tap on and flooding your home, upending the paint tin on the carpet, dropping an antique vase, or hitting a golf ball through the kitchen window.
Accidental damage is the most common reason for a claim on a home insurance policy, yet many people don’t realise the level of cover their policy provides. The FOS often receives complaints from policyholders who weren’t aware that they had no cover for accidental damage, or that the cover needed was an optional extra, only realising this after an unsuccessful claim.
You’ll usually be able to add accidental damage cover to your policy, if it’s important to you, so repairs or replacements are paid for, up to certain limits. Claims for accidental damage go up during school holidays, so it might be one for parents to bear in mind.
It has to be sudden, accidental damage to be covered, so wear and tear, deterioration over time, deliberate damage and poor handiwork won’t get your claim paid.
When policies do provide accidental cover as standard, it may be limited to underground service drains, pipes and cables, and fixed glass and sanitaryware like toilets and basins, but it varies by insurer. Read the policy conditions, so you’re clear on the level of cover provided as standard, and what the policy add-on covers.
Subletting without telling your insurer
Nearly half of tenants who sublet the place they’re renting to another person don’t tell their landlord they’re doing it. Renting out a room without your landlord’s permission can void your tenancy agreement if it’s in breach of the terms, and it can also void your tenant’s contents insurance. Not to mention the implications for your landlord’s home insurance and if they have a mortgage agreement.
If you have written permission from your landlord to rent a room out to someone, contact your insurer, so they can adjust your contents insurance policy and premium to reflect that. Your subtenant will need to take their own contents insurance policy out, if they want cover for their belongings.
Not locking doors and windows
If you leave windows open or doors unlocked, or your burglar alarm or CCTV isn’t activated, your insurer may not pay out after a break-in. Most home insurance policies will have a clause that states they will only pay out for a burglary if your home was entered using violence or excessive force, while the security measures you told them you had were in place.
In over a third of all burglaries, the perpetrator lets themselves in through unlocked doors or windows, without forced entry. To an insurer, you haven’t kept up your side of the deal, which is to take measures to secure your home and make sure doors, windows and gates are locked while you’re out.
A burglary is a traumatic enough event without the added stress of a declined claim. Whether you’re popping out for five minutes or going on holiday, make locking up a habit if you want to prevent making an opportunist thief's life easier. It’s also a good idea to close and lock windows in unoccupied rooms, for example, if you’re upstairs working or cleaning.
And don’t be tempted to hide the front door key under a plant pot or doormat. If lost keys or hidden keys are used to gain entry to your home, it’s not forced entry and your home insurance claim for any stolen contents may not be paid, though this will depend on the insurer.
When you apply for home insurance, you’ll be asked about your level of home security, including the types of locks on ground floor and accessible windows and external doors, along with other security measures.
The types of lock and condition of them plays a part, too. If they don’t meet the standards your policy outlines, or you haven’t maintained them properly, your claim may not be successful. In areas with a high rate of crime, the insurer may specify a particular high standard of secure door and window locks, and that you have a burglar alarm. The alarm must work and be activated when you’re out, and some policies ask for it to be on at night when you're asleep, too.
Underinsuring your belongings
If the insurer finds that you’ve underinsured your belongings, they may not pay the total value of any claim you make. Say your contents insurance cover amount is £20,000 but the total value of your possessions is found to be £40,000. In this case, any claim you make will be paid out as half the amount, as you only insured your contents for half their value.
The maximum amount of cover your policy offers needs to match the value of all your belongings. Include items in lofts, basements and garages, as well as anything over the policy’s single item limit, which may need to be listed separately.
Review your total cover amount before you renew or switch your contents insurance, and add any high-value items you buy or are gifted over time. Holidays like Christmas can be a bumper time for burglars, with the average value of items stolen by thieves being £2,250. Insurers sometimes add 10% of cover immediately before and after Christmas, but this festive goodwill ends in January. So review your cover amount and specify anything above the insurer’s single item limit, or you may end up underinsured.
Putting off building repairs
If you own your own home, you’re usually responsible for fixing problems with the building. So if you let that leak continue, or don’t replace a roof tile or clear clogged gutters, and more serious and expensive damage follows, your insurer may reject your claim because you knew about it but let the problem get worse.
Home insurance is there to cover unexpected and sudden events outside your control, like floods, storms or burglary, not wear and tear or your home not being properly maintained. So neglecting repairs and general upkeep won’t put you in a good position when you make a claim.
Mind you, it’s worth knowing that if you tackle fixing things that you’re unqualified to tackle, like electrical, gas or plumbing work, and cause damage, even if you have accidental damage cover, your insurer may not pay out and it could invalidate your policy. So it’s probably sensible to leave specialised jobs to registered professionals.
Not realising what isn’t covered
Though most home insurance claims are paid out, many unsuccessful claims are thought to happen because people aren’t fully clued-up on what their policy does and doesn’t cover, known as exclusions.
Policy exclusions are listed by your insurer in the product documents. The insurer must provide this information to you in an easy-to-understand format. They need to make sure the cover is right for you and explain the policy and any add-ons they offer clearly. But it’s also important that you read the documents they supply, to make sure you’ve got the right level of cover.
It’s better to be clear on policy exclusions from the start, but if you’ve just bought your policy and realised the cover isn't quite right soon after, get in touch with your insurer as soon as possible. They must offer a cooling-off period where you can cancel a home insurance policy up to 14 days after you buy it or after receiving the policy documents, whichever is later. You’ll only be charged for the days it was active, though you may have to pay an administration fee.
Leaving your home unoccupied without telling your insurer
If you have standard buildings or contents insurance and leave your property unoccupied for more than 30 or 60 days in a row, your insurer may not pay out if you make a claim. The risk of damage, leaks, vandalism and theft increases when nobody’s home. And when damage stays unnoticed, it can cost more to fix if it gets worse.
A few reasons why a home might be unoccupied for an extended period are:
- It’s a holiday let or a holiday home that’s only used in the summer, or occasionally.
- You’re travelling for a time for work, or having an extended holiday.
- You’re managing the estate of someone who has died and you’re waiting for probate to be granted before selling up.
- You’re renovating a property but not living in it yet.
- It’s a buy-to-let and there’s a gap between tenants.
If your property is going to be unoccupied for more than 30 days, or, for some policies, 60 days, let your insurer know. You can take out specialist cover like unoccupied home insurance, holiday home insurance or landlord insurance, which factor in properties being empty for longer stretches of time, along with offering other benefits, such as covering loss of rental income after damage to your home, like a burst pipe, makes your property uninhabitable. And while standard home insurance policies usually last a year, these specialist policies last for anything from three months to 12 months, to cover the period it’s unoccupied.
You may be asked to take a few precautions to help reduce risks and maintain your property while it’s empty, as a condition of the policy. That might mean regular visits, timing the heating to come on to prevent pipes freezing in winter, or installing security devices like burglar alarms. As these stipulations vary by insurer, check the policy details, so you know what’s expected of you.
» COMPARE: Unoccupied home insurance quotes
Mistaking market value for the rebuild value
When you take out buildings insurance, you’ll need to find out the total cost of rebuilding your property from the ground up, if it was destroyed, including clearing the site. This will usually be less than what you’d sell it for, because the land, and other factors like supply and demand for property in your area, aren’t considered when working out the rebuild cost.
If you moved recently, you should be able to find the estimate on your surveyor’s report, title deeds or mortgage valuation report. You can also get an estimate using the Association of British Insurers’ online rebuilding cost calculator, or pay a chartered surveyor to work this out for you. As the cost of rebuilding a property can increase over time, review the figure when you renew your policy. Some insurers index-link the policy, so any rise in rebuild costs over time are automatically accounted for, but it’s still a good idea to check this yourself every few years.
If you’re having an extension built or carrying out other renovations that may affect the rebuild cost of your property, tell your insurer, so your cover amount can be changed to reflect that.
Not answering the application form questions accurately
When you apply for home insurance, you’ll be asked to confirm you’ve answered the questions fully, truthfully and accurately. If it comes to light that you misrepresented information when you applied, your insurer may not pay out if you make a claim on your contents or buildings insurance, and they may cancel your policy.
While insurers carry out checks as part of the underwriting process, they rely on the information you provide being correct. Your answers help them work out the risk of offering you cover, how much cover you need, and the premium you should pay. For example, you need to tell them about the type of locks and any alarm systems in your property, and any recent claims, along with the total cover amount you need. Before you submit or sign your application, read it carefully, and don’t forget to check any pre-filled answers if you’re applying online.
Sharing your holiday snaps on social media
If you get the urge to share that perfect sunset shot when you’re thousands of miles away from home, think twice. At the risk of sounding like a killjoy, you could be creating easy pickings for potential thieves while your home is unoccupied.
If you make a claim after a break-in that happened while you were away, and the insurer checks your profile, these social media posts may not help your cause. While an insurer may not decline a claim just because you posted a photo, they do expect you to take reasonable care in protecting your home when it comes to security.
Adjusting your privacy settings so they're not public, turning off location services, and restricting tagging, might help keep things less visible. But regardless of whether your insurer can see the post, or will take it into account when assessing a claim, few people know all their connections and followers, so it may not be a great idea anyway, at least not until you’re back home.
Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years. Read more