Farmers Arms

There are many Listed and thatched properties in Chideock and I am sure many owners, myself included, were under the impression that they were adequately insured. After the devastating fire at The Clock House resulting in a much reduced pay out as their Insurance Company claimed they were under insured I reviewed my policy. At first I was reasonably happy with the amount I was insured for but upon further investigations I have learnt that I also am probably about fifty per cent underinsured according to the way Valuations are done by Insurance Companies. I will try in ‘lay mans terms’ to explain and use my property of The Farmers Arms as an example. When purchasing cover for ‘Buildings Insurance’ one has to arrange ‘cover’ for a total loss, i.e. a plane dropping out of the sky and not only flattening your house but also gardens, walls, outbuildings, garages, summer houses, fencing, slab paving, patio paving, exterior lighting, etc., At this stage you also have to think about repairs to drains, gas connections, electricity supply and any other services. On top of this you have to then add in approximately 13% of your buildings cover for Architects fees, planning consultants and surveyors plus VAT on these fees. The rebuilding costs of your house are not based on the ‘price from the builder’ but are based on ‘tables’ held by the Insurance Companies – this is called a Reinstatement Calculation. The ‘tables’ used are in a programme that is licensed from The Building Cost Information Service who provide the rebuilding cost tables that are recognised by the insurance industry – they are not available to the public! The above is what you have to take out cover for – all of it down to the birdbath! PLEASE NOTE THAT INSURANCE VALUATIONS HAVE NO BEARING WHATSOEVER ON THE VALUE OF YOUR PROPERTY ON THE OPEN MARKET. We decided to employ the services of an Independent Chartered Surveyor to ‘value our property for rebuilding costs for insurance purposes’. Prior to his visit we were insured for £500,000 (It is worth mentioning here as a comparison that the Contract with C.G. Fry Ltd., to rebuild The Clock is £475,00). As I suspected and based on the ‘tables’ from the Building Cost Information Service used by Insurers the Valuation for Insurance Purposes on our property is £950,00. Of course, we all know that a total devastation of our house, gardens, garages, etc., in fact just being left with a ‘hole in the ground’ is highly unlikely and that possibly the house burning down in a similar way to The Clock House is our worst case scenario BUT this where the Insurers step in to make their Valuation and if you are considered underinsured they start making ‘adjustments’ to the amount of money they will pay to settle your claim. Again this is based on some sort of sliding-scale but roughly speaking means if they consider you underinsured by 50% then you will be lucky to receive 50% of your claim and will be considerably less than the amount you insured for. Example: House insured for £650,000 which has been damaged to the cost of £300,000. Insurance Company valuation (based on tables) turns out to be £900,000 the amount you will receive will be reduced to approximately £150,000 -£200,000. Why you ask – when I am insured for £650,000 and the rebuild cost is only £300,000 am I only getting £150,000 you will be told ‘that is the way it is’ AND that will be all you get. We are the lucky ones who have time to address our policies, sadly for Mike & Helen it is too late. Even if you do not have a Listed Building please consider the above when making your calculation as the same can apply to you.     Lyn Crisp

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