The RSA is a FTSE 100 company and one of the world’s leading multinational quoted insurance groups. It has a full multi-distribution capability, writing business through brokers and corporate partners, direct and online. And yet, despite all this it has failed to get a strong foot hold in the high value home insurance market, though not for the want of trying.  

It had for many years its own high value home insurance product called Prime Choice, and it was an excellent policy. It may still have this brand but I am not aware of it as it has dropped off the home insurance radar. I cannot remember when the Prime Choice brand was mentioned by a customer, or specialist high value home insurance broker, of whom it had some loyal supporters.  

If my memory serves me well RSA lost their broker support when they effectively disbanded their dedicated Price Choice underwriting centre, diluting the experience and knowledge base by relocating it to a “cheaper” part of the country. In short, it was a disaster for them and perhaps a lesson learned.  

In Oak Underwriting (www.oak-underwriting.co.uk) they have acquired a business dedicated to the needs of high value home owners. In just over ten years, Oak have attained an enviable position as a market leader in this highly valued niche home insurance market by providing a product that high value home owners want, a service that specialist high value home insurance brokers demand (they do not distribute the product directly to the public) and back this up with the all important back end claims service, that keeps everybody happy and, ultimately, upon which any home insurance policy is judged.  

On paper it is a good fit and, providing that RSA adhere to the old adage “if it ain’t broke don’t fix it”, I am confident that it will be business as usual for all parties, in turn, benefiting all.  

There is a word of caution, however. In the late 1990s RSA entered into a joint venture with Chubb Insurance Company of Europe under the Masterpiece product. On paper, it was a good fit for both. The products were similar and both insurers wanted to make the great leap forward in market share of high value home business. But it was a relatively short lived marriage as the ethos of each company was completely different (somehow I am reminded of the Coalition government in this respect!) and they soon parted ways, with RSA taking a backward step in my opinion. I hope that they have learnt from past experiences. 

Geoff Moss

Dovetail Insurance Services Ltd

Tel: 01242 699113

Most standard home insurance policies will give little or no cover for gifts as it is a bit of a grey area. Technically, the person who has bought the item is the owner until it is officially handed over to the recipient, who cannot insure the item as they are unlikely to know its worth, or indeed even what the item is.

Fortunately, the high value home insurance companies understand this and all the policies that Dovetail Insurance Services Ltd promotes make provision in their cover for not only wedding presents but also birthday, religious or other celebrations. As an indication this is what is on offer from the high value contents insurance policies: 

Oak Underwriting (www.oak-underwriting.com) – 25% of the contents sum insured for 30 days before and after the event 

Elite Home – Temporarily unlimited with a specific restriction of £5,000 for jewellery and watches (if the gifts include items of jewellery or watches it is always best to notify insurers to clarify the cover they will give) 

Sterling Executive Home (www.sterlinginsurancegroup.com) – £10,000 with a single article limit of £1,000

 Aviva Distinct Home (www.aviva.co.uk/distinct) – 10% of the contents sum insured 

Palladium Insurance (www.palladiuminsurance.co.uk) – £20,000 for one month before and after 

J R Clare Lifestyle (www.jrclare.co.uk) – £10,000

These uplifts in cover occur automatically so there is no need to notify insurers but as each insurer offers different levels of cover, and periodically insurers revise their policy cover, it is always best to check before hand with your specialist home insurance broker, who can advise specifically what you have in place.

 Geoff Moss

Dovetail Insurance Services Ltd

Tel: 01242 699113

Up until then you had to take out contents or buildings insurance through an insurance broker but now RT was offering an alternative by cutting out the insurance intermediary and speaking with them directly. It was a revolution, one which many of the traditional home insurance market was sure to fail.

But it did not. Millions of home insurance customers picked up their phone and ultimately switched either their contents or buildings insurance. Admittedly, there was only one home insurance quotation on offer, as opposed to the several that an insurance broker may provide, but if it was cheap as chips it didn’t matter to the consumer. The main brand home insurers had to ultimately follow suit and offer their contents and buildings insurance products directly to the public.

The downside for the consumer that it was a “tick box” underwriting mentality. If you gave all the right answers to the questions you were in. If you could not, or wanted to insure something a little bit out of the ordinary, then you had to revert back to the specialist home insurance market.

Some 26 years later, in early 2011, RT has decided that they are missing out on some quality business and have now launched their own product aimed at the high value home insurance sector. They have had to create a specialist high value home division with trained up staff, back up services such as a surveys and a product that offers the quality expected by a high value home owner, at a price that is attractive to them.

The latter is interesting to me because I am receiving more and more calls from RT policyholders, who are high value in terms of buildings, contents or both, who are not getting the required attention. In fact, I am pretty sure they are not even being referred internally to their high value home insurance division, but are being turned away by the call centre. It is, of course, my gain as a specialist high value home insurance broker.

It will be interesting to see if RT can make a success of their high value home insurance product, and part of me wishes them well because it is headed up by an old friend of mine from the student insurance days (the home insurance world is a small one). My big advantage is that I have a 25 year start on them in terms of high value home insurance and can knowledgeable speak with my clients. That will be the biggest challenge for them, the front end telephony, and only time will tell if they “select” the right people.

Geoff Moss
Tel: 01242 699113

Both pianos cost in excess of £30,000 and this exceeded, by some margin, the single article limit allowed on their standard contents insurance. It was simply a case of “no” from their home insurer. This is a common approach from what I call the “tick box” home insurance companies that target the mass market and do not want to accommodate anything that does not suit their needs, rather than adapting to suit the needs of their clients.

I always find this a strange stance. Just what are the home contents insurance companies afraid of? Yes, it is one item of high value, but it is actually quite a good risk when you think about it. Firstly, no one is likely to steal it due to its size, even if they wanted to, which I very much doubt. And it cannot be taken outside the home so it poses no threat of loss like a high value item of jewellery, such as a ring or watch.

Indeed, the only real risks are fire, water damage and accidental damage. The latter two are likely to result in the need for some repairs and restoration, not a total loss. If there was a fire in the home, a total loss may occur, but then again all the contents would be at risk and the home insurance company would have that risk anyway.

The third client gives us an indication as to how the specialist home contents insurance underwriters view the risk. He described his piano as an antique, rather than a new one, and thus the specialist home insurances charge a premium rate much lower, knowing full feel the risk exposure they had was as described above. In fact, they provided a high value home contents insurance quotation for the two new Steinway pianos also.

To summarise, the standard home insurance policies considered the pianos to be high risk whilst the specialist home contents insurance policies considered it to be low risk. The former said “no” without hesitation and the latter said “yes” without hesitation, going even further and charging a low premium rate for the high single item.

This approach from the high value contents insurance companies extends to other high value single items, or collections, such as pictures, paintings, antique furniture, statues, bronzes, to name just a few. I have even arranged a quotation and cover for a high value telescope kept in the garden to my clients to star gaze in the last few weeks.

So when your home insurer says “no” or does not understand what you need your home insurance policy to cover, think about the specialist home insurers who can normally accommodate most high value items within a buildings and contents home insurance policy.

Geoff Moss
Tel: 01242 699113

The rate for Insurance Premium Tax increased today from 5% to 6% and will apply to all home insurance policies that have an inception or renewal date from now onwards. If you home insurance policy is not yet due for renewal you will not pay any more until it falls due, and then it will be unavoidable.

This increase not only applies to the buildings or general contents of your home but also the insurance of any collections, fine art, antiques, etc that you have attached to you specialist home insurance package. In the scheme of things, it is probably not a huge increase, the first since the flat rate of 5% was introduced by the government at the time in the mid 1990s. But is does all add to the cost and equates to £10 for every £1,000 of premium that you pay.

If you also have Annual Travel insurance attached to your high value home insurance policy you will pay even more. Annual Travel insurance has always been charged at a much higher rate than (general) Insurance Premium Tax. It was 17.5% but has simultaneously been increased to 20%.

There will be a third, virtually unseen increase in your annual high value home insurance premium as the rate of VAT has also increased to 20% today. How is this relevant to high value home insurance?

Well, virtually every home insurance company does, or at least should, index link the contents sum insured each renewal. This is usually based on the Durable Goods Index, although not always, which in turn is based on the cost to replace such home furnishings and the like. As these will increase in cost due to the VAT increment so will the monthly index linking figure automatically applied to you high value home insurance, although this is only usually applied to the general contents section and not necessarily any extensions in respect of paintings, antiques, collections, jewellery or watches.

Similarly, the buildings sum insured should be linked to the Re Building Cost Index published monthly by the Royal Chartered Institute of Surveyors, which will also be, in turn, affected by the increase in the VAT rate, reflecting the increased cost of materials and the labour required to repair the buildings of you home following damage.

Taken separately, the individual increases would probably not be noticed my the majority, but the combined effect of all three may make many take a sharp in take of breath when their renewal notice lands on the mat through the post as 2011 progresses. It will be a good time for you to check that your high value home insurance still offers good value for money. But I would say that wouldn’t I?

Geoff Moss
Tel: 01242 699113

When she took the policy out several years before she was asked to declare when the property was built, choosing from a small range of options. The most appropriate to her circumstances was that her home was built pre 1920 but no further questions were asked. This year the insurance company underwriting this particular home insurance scheme had changed, and now they were asking more questions:

“Is your home a listed property?”
“ Yes, it is Grade II listed dating from the 16th century but is, in the main of standard construction apart a couple of timber framed rooms upstairs”
“In that case, we are going have to re rate your renewal premium accordingly”

Mrs O had been paying a little under £700 and was hoping for just a small increase in light of this “new” information, which was not new at all and readily available. Astonishingly, even to me let alone Mrs O, the renewal premium was increase to over £1,500, an incredible increase of over 100% for no reason other that the property was a listed building. In Mrs O’s own words, “they clearly didn’t want me anymore”.

Fortunately, Dovetail Insurance Services were able to source her quotation with a specialist home insurance provider, who understood the risks of owning a listed property. The quotation was just a little more than Mrs O was paying and her problem was solved.

I thought that this might be a one off unique situation but a few days later I received a call from Mr V who was in a similar position. The same organisation, the same questions and then an increase in the renewal premium from £600 to £1,000. Once again, I was able to source a quotation for both the buildings and contents insurance, not of particularly high value or with items of fine art, antiques or a collection, for £650. More importantly for Mr V, and indeed Mrs O, was that their insurance provider was fully aware that their home was Grade II listed and all the implications that may imply if dealing with a major home insurance claim.

Once again I am reminded by these stories that if your home or its contents are unique, either because they are high value or a listed property, the well known brand names in the home insurance world are, in the main, not equipped or in most cases willing to provide suitable home insurance cover. It is worth speaking to a specialist high value home insurance broker who will, at least, listen to what you have to say.

“Hi Geoff, This looks good. Thanks for getting a range of quotes – impressive given
my own lack of results”.

Mr B lives in a normal family home and has a passion for collecting coins. Up until now, however, he has had to keep his valuable collection in a bank safety deposit because he could find no home insurance company willing to add the collection for cover whilst at home. He had spoken to many well known home insurers, the ones that advertise on television and in magazines, but all flatly refused to accommodate him. The value of the collection was more than they were willing to insure.

Mr B was willing to install an appropriate safe, even upgrade his alarm if necessary but still the answer was “no”. Then he called me and after a few minutes to discuss his needs I was able to source four quotations from specialist high value home insurers, all at a reasonable annual premium though it was, of course, more than the basic home insurance policy that he currently had. He is now able to have his collection at home and enjoy whenever he feels the need.

Mrs and Mrs H have a passion for astronomy and have an expensive telescope in their garden housed in a purpose built observatory. They also have a couple of nice pieces of jewellery but nothing too expensive. They have a standard home insurance policy with one of the well known companies but adding the telescope was beyond the comprehension of the person in the call centre. Many calls to other insurers due the same blank. As Mrs H said to me, if you cannot tick all the boxes “yes” and have something slightly unusual they just do not want to know, or even if they say they will cover it, the documentation showing this leaves a lot to be desired.

Needless to say this is a very straightforward risk to accommodate. What it needs is an insurer that is prepared to think differently and listen to what the client and myself have to say. The specialist home insurers, which tend to cater for high value homes, do just that. But as these two examples highlight, it is not always the million pound buildings that have complex insurance risks, which need a bit of lateral thinking. They understand this and through my relationship with them are willing to listen, invariably offering very fair terms.

So, if you have something out of the ordinary, that needs to be included on a home insurance, preferably buildings and contents together to get the best possible terms, it is worth giving me a call on 01242 699113.

Geoff Moss

A very common mis conception amongst home owners is the current market value is a reflection of the re buildings costs of your home. In reality, the two have very little to correlate them and there is no recognisable guide or formula to get from one to the other.

In most normal circumstances, the market value will be higher than the true re buildings costs of your home, so by using the market value you are likely to be buying more home buildings insurance cover than you need. This is, of course, better in the event of a catastrophic event than under insuring your home, the latter which can compound an already disastrous circumstance, but it also probably means that you will be paying more for your buildings insurance than you actually need.

You can obtain the re building cost of your property by a number of ways, which include the following:

1. If you have a mortgage, the surveyor commissioned whether by your self or on behalf of the lender is very likely to have calculated the “figure for insurance purposes”. This may now be a few years old, depending on when you bought the property, but if it is within a few years you can use it as a base starting point from which you can index link on a compound basis for each year since the purchase
2. You can commission now a suitably qualified chartered surveyor to visit your home for the sole purposes of calculating accurately the re building cost of your home. You will find a suitable such professional local to you on the Royal Institute of Chartered Surveyor’s website (www.ricsfirms.com)
3. You can do the calculation your self. This is not recommended but there are guidelines available although not suitable for all types of homes. I will cover this in the next blog
4. Some of the high value home insurance companies will commission a suitable professional to do this at their own cost. There is usually a qualification for this based on the size (sum insured) of your home or the premium that you pay

A final word for today, whatever you do, do not try to cut insurance costs by buying home buildings insurance cover below what you actually need. It is your most valuable asset, your home and your future at risk.

Over a series of articles I will go into greater detail of what you should consider and what may be on offer to you, but for now let us look at the basics. 

As a home owner, a catastrophic event, which is fortunately quite rare but a possibility nonetheless, that completely destroys your home or renders it uninhabitable is the worse case scenario. Typically, this might be a fire, an event that all home insurance policies should cover. 

Whilst unlikely, it serves as our starting point as you would have completely lost the home you live in and all its contents. Should you not have home insurance cover, this effectively makes you homeless with no financial back up from which to start again. This is a scenario that most of us would not care to dwell upon too long. So we will not! 

The very basic need of your home insurance policy is that it should enable your home to be completely re built, having been demolished if necessary to clear the site, and then re furnished to the standard that you experience prior to the insured event. 

To do this you need to have adequate cover, which is referred to as the “sums insured” for both buildings and contents. In respect of buildings this should be the re-building cost, and not the market value if sold which can be very different, and the full replacement, usually “as new” for most modern home insurance policies, in respect of the contents. To under insure, whether knowingly or not, can leave you seriously out of pocket and in extreme cases invalidate the policy entirely. 

To conclude, your starting point to assess your basic home insurance need is 

a)                  How much would it cost to re build my home ?

b)                  What is the total value, as new, for all the contents of my home? 

And if you excuse the pun, you now have the foundation on which to build the specific needs and requirements that I will look at in more detail.