House Building Cover

House Building Cover – One of the crucial misunderstandings in this area is the extent of the cover. Normally, policies make it quite clear that inevitable wear and tear, which ultimately will result in repair work, is not part of the household building cover. There is little that insurers can do in educating the public to this fact other than by making explicit in the insurance proposal form and introductory documentation and policy wording. In particular, insurers should be certain that their advertising does not mislead prospective policyholders.
A particular source of confusion for policy holders is the difference between standard cover and ‘all risks’ cover. The policy tends to list what is not covered under the latter. The public tend to think that everything is covered unless specifically excluded. What is needed is a more explicit policy document. Many companies have, in recent years, attempted to spell out more clearly the cover offered in their accompanying literature. One might be allowed the pessimistic view that policyholders only read the insurance documentation when a claim arises. At that date, it is too late to discover that the policy is more limited than originally presumed.
Insured’s should be wary of accepting advice on insurance claims from those who stand to benefit from such advice. The example given by the Ombudsman concerns builders. They may give the impression that more extensive repairs are covered by the policy than is in fact the case. When the insurers point out that such repairs are not covered by the policy, the insured will be left to pay the bill. The answer is not to instruct builders until authorisation has been given by the insurer.
The policyholder should also remember that when he has presented an estimate to his insurer which has been accepted, he is not at liberty to give the work to another builder who will undertake the repair work for a lesser sum. The insurer could authorise the change of builder, but, if this is done, then the insurer would be liable for the lesser sum. There is nothing to stop an insured from carrying out his own repairs, if competent to do so, and then charging the insurer a fair rate for the job. If the work is incompetently done, he would however, have no further recourse to his insurer for further repairs.
The Ombudsman is frequently faced with problems relating to subsidence claims in home insurance. It is necessary to distinguish subsidence from settlement. The latter occurs in new buildings, usually resulting in minor cracks and is often excluded from policies. But, where the damage is greater, it might then be described as subsidence and is not always easy to decide if it is covered by the policy. The fact that damage may occur over a period of time raises the problem of liability where the house has had a change of owners. The Ombudsman’s view is that so long as a substantial amount of damage has taken place during the new ownership, then his company should pay for the repairs within the policy wording. But, if it can be shown that there must have been considerable damage prior to the change of ownership, then the new insurer and insured should apportion the costs between them. If the new owner is aware at the time he takes out the policy that there has been some subsidence, then failure to declare this on the proposal form will amount to non-disclosure and the company will be able to avoid the policy. Even then, the Ombudsman prefers very specific questions to be asked relating to subsidence and not questions of a general nature.
Another source of friction between the insurer and insured relates to claims for decoration repairs resulting from a leaky roof. Policies normally cover only storm damage. They would not cover faulty roofs. The problem then is to define’ storm’ or ‘tempest’. Each case must depend on its facts, but what the Ombudsman looks for is usually a ‘disturbance of the atmosphere which has to be present when any violent meteorological phenomenon’ arises. The insured must be able to point to a particular storm on a particular day. What the insured cannot do is point to an accumulation of bad weather over a given period, because this would lead to a claim which might hinge on a lack of maintenance rather than a storm.