Insurers are accused of showing little interest or knowledge of properties they insure. Michael Faulkner found some homes which insurers may wish they had inspected before offering cover
With incre ...
Insurers are accused of showing little interest or knowledge of properties they insure. Michael Faulkner found some homes which insurers may wish they had inspected before offering cover
With increased emphasis on technical underwriting coupled with demand for increased underwriting profits, one would expect insurers to be meticulous in the selection and assessment of the risks they take on.
But it seems that in the case of non-standard properties, insurers may not have a clear idea of what they are taking on.
Jeremy Till, whose property is partly constructed of straw bales, found that his insurer lacked the necessary knowledge to properly assess the risk.
"We outlined the construction materials to the insurer," says Till. "A person from AXA subsequently came round to look at the property; he didn't have a clue."
A worrying state of affairs, not only for the insurer but also for the policyholder who may find that he does not have the right policy coverage or risk management advice.
However, this ignorance is perhaps not surprising when an underwriter at AXA admits "we don't have a lot of experience in this area".
Legal & General head of technical services Ray Facer is surprised that an underwriter would agree to insure a risk that he did not properly understand.
"An underwriter is duty bound to give the risk appropriate and careful consideration. If he were in a position where he did not understand the risk, he should find a source of information to enable him to understand."
It is all too easy for non-standard homeowner to obtain cover on standard policies. Nick White - a resident of Hockerton Housing Project, which is a community of earth-sheltered homes, says: "We have learnt not to say too much. If insurers can't fit the property into one of their standard categories they start to panic. We pretend our project is relatively normal."
HOUSE IN WILTSHIRE
Insurer: Legal & General (through Barclays)
Sum insured: £375,000
Premium: approximately £1,080
No unusual terms and conditions
This house, owned and designed by Foster & Partners director Ken Shuttleworth, is in the shape of a double curve, described as "two croissants mating." One side of the house is made completely of glass, using 30 4m-high glass sheets, each worth £2,500. The fundamental structural material is concrete.
9 STOCK ORCHARD STREET, LONDON
Insurer: AXA
Sum insured: £750,000
Premium: £1942 per annum
No unusual terms and conditions
Straw bales, sandbags and recycled concrete are some of the materials used in the construction of this property. The straw bales are used as infill between timber trusses and are clad with a mixture of corrugated metal and polycarbonate. Load-bearing structures have been created using gabions (wire cages full of rocks). Sandbags are used as window surrounds.
Co-owner and architect Sarah Wigglesworth said: "We did not have that much trouble obtaining insurance. The building is considered no more dangerous than one with just a timber frame."
SKYWOOD HOUSE
Insurer: Legal & General (through Barclays)
Sum insured: £600,000
Premium: approximately £1,200
No unusual terms and conditions
This house was designed as a "glass box in the wood," according to owner Foster & Partners director Graham Phillips. It is based on a classic pinwheel form of ultra-long 3m high walls which contain concrete frames.
The living spaces are created by two frameless glass rectangular forms. There are no opening windows; ventilation is provided through electronically operated roof lights.
HOCKERTON HOUSING PROJECT, SOUTHWELL NOTTINGHAMSHIRE
Insurer: CIS
Sum insured: £100,000
Premium: approx £275 per annum
No unusual terms and conditions
These self-built homes are described as earth-sheltered: in non-technical jargon this means that the roofs, rear walls and end walls are covered by 0.5m of turf. Some have likened it to living in a hole in the ground.
Resident Nick White said: "We had initial difficulties obtaining buildings insurance. Once we found one insurer to do it, we had no problem transferring to another later."
