Introducing the inaugural edition of the Mango Insurance Blog, where our team provides expert tips, explainers, and news from the insurance industry to assist you in navigating and enhancing your understanding of insurance coverage.
Our initial post delves into Property Owners Insurance, addressing common issues with available options, illustrating potential pitfalls of inadequate coverage, and offering tips to ensure proper protection when obtaining this type of policy.
What is Property Owners Insurance?
A Property Owners Insurance Policy is designed to cover several different scenarios, commonly used to cover where there is a Landlord that covers a Buy-to-Let Property or Commercial Property that is rented out, for Blocks of Flats or a property where you might have a shop or office with flats above. It covers you for events like flooding and water damage, fire, storm and subsidence.
Due to the recent increase in prices for these insurance policies, numerous individuals are seeking alternative quotes. Therefore, this article will examine some key aspects to consider in your Property Owners Insurance Policy.
Don't be Fooled!
Whilst there are some great ones on the market, the price of some Policies may make them tempting on first impression without truly offering suitable cover! There are ways of selling cheaper policies that are often used, by cutting corners on essential elements that are there to protect you in the event of a claim. As the saying goes ‘If it seems too good to be true, it probably is!’ - and this is so true in the world of insurance. Sometimes things go wrong and that’s just a fact of life.
As insurance brokers, we exist to empower you in getting the right cover at the right price, and we can’t stand hearing of people thinking they’re safely covered, only to be devastatingly let down when they have to claim and find that their policy was lacking or just never right for them in the first place.
Trace & Access Cover
For Blocks of Flats or where there is any residential property, one of the main claims seen are Escape of Water Claims. However, an oversight which is quite often used within a claim is the Trace and Access portion of the property.
Trace and Access does exactly what it says on the tin - it covers the cost of Tracing and Accessing the Leak, however, what is not always understood is the high costs that can be involved in this, so the ‘cheaper’ Policies that have very low limits on this may not be suitable.
When Things Go Wrong
Imagine you have discovered a leak behind the tiles in your bathroom and are having to gain access to it. It's not possible to go in through the wall on the other side and therefore you have to break your lovely tiles, and then, once these are ruined, you realise that the shower tray also needs removing to be able to fix the leak and this breaks during removal so a new one is required. All of the costs for the removal, refitting and replacements would come under the Trace and Access section of the policy. An example like this could cost £10,000 to remove and reinstall. Therefore, if you have a restricted Trace and Access limit of just £5,000 you could be out of pocket! It’s important to note that‘ Escape of Water’ claims alone will only cover the resultant damage to the property and the cost of repairing the leak itself is not covered.
A Note on Flooding
Another thing to be wary of with the changing flood mapping from Insurers is whether flood has been excluded in the Policy. We are seeing an increasing number of instances where people are unaware that flood cover has been excluded, which could have disastrous consequences. Excesses should also be checked very carefully as these seem to be forever increasing and changing at renewal dates.
Another Common Mistake
Unoccupancy is also another big factor within Property Owners Policies, and the wording on this might have a significant impact, particularly on Blocks of Flats. Some of the more limiting policies will require you to notify the insurer if any individual flat becomes unoccupied for more than 30 days. This can cause problems on larger blocks of flats that might have 1 or 2 flats unoccupied at any one time. Therefore, for Blocks of Flats or properties which have a large number of flats, this is something to be mindful of.
Our Advice
Overall, it is important to carefully review the Endorsements and ensure a clear understanding of them. Verify any Conditions Precedent stated in the Policy wording, as these may not be visible on the Schedule but can impact claim settlements. Opting for the cheapest Policy will likely result in insufficient coverage. If you have not worked with a broker before, consider giving them a try since they specialise in identifying coverage gaps and recommending additional protection. If you would like a quote on property Owners Insurance from Mango, simply fill out the form below!
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