We were approached by a specialist Geostructural Foundations company who were undertaking the installation of a new basement and lower ground floor refurbishment to a substantial residential property in West London to see if we could assist their client, the homeowner, who had a particular difficulty with their Household Insurers as a result of the Works being carried out.
Upon speaking with the homeowner, it appeared their current Household Insurer had become alarmed at the value of new Works being undertaken in relation to the current rebuilding value of the property. As a result, they had refused to continue cover on the buildings and would only be prepared to reinstate cover once the Works had been completed.
With contractors already on site and work underway, the homeowner found themselves effectively uninsured in respect of their home.
Not unusually in these circumstances, the homeowner and his family had decided to continue to reside at the premises whilst the works were ongoing. As these were generally “below ground” and therefore the only point at which the contractors had access to the existing structure was towards the end of the contact when they broke through to create the basement entrance.
Buildings being “worked upon” or in the course of refurbishment are rarely an attractive proposition to Insurers and it would also be a material fact that must be disclosed to new insurers when asked, “if any Insurer has ever declined or refused cover” to you as the homeowner and/or proposer of an insurance policy.
On occasions, it is possible with the contractors’ agreement to extend their annual Contract Works policy to include the existing structure (the home) where the underwriter is prepared to grant cover and the contractor is agreeable to doing so. The drawback here for the homeowner is that his property is insured under another party’s policy and the contractor could be penalised should a serious claim occur and subsequently affect his policy’s claims experience and hence future premium costs.
MPW however, were able to source an independent Insurer that was prepared to cover the building on an “All Risks” basis for the duration of the works and were even able to include an element of unfixed materials for incorporation within the works which had been purchased by the homeowner as opposed to the contractor i.e. oak doors and kitchen units. What may otherwise be termed “free issue materials”.
The cover was subject to a short proposal form and details of the work being undertaken and cover was placed within 24 hours of the homeowner’s first call to MPW.
We have often found that Household Insurers will take a strict view when considering continuation of cover when building works of a certain value are being undertaken, although this alternative provided a simple solution to what is becoming a frequent obstacle for many homeowners wishing to extend or renovate their properties.
09 November 2012