Home contents policy with alternative accommodation cover?

samizdat

Suppose you have a leasehold flat. The freeholder is responsible for the buildings element of insurance cover. However, the policy does not cover the lessees for alternative accommodation if, e.g. the whole building is burnt to the ground, and the freeholder is unwilling to extend the policy.

Is such cover available on contents policies? I have not found any such policies.

If not, what should a leaseholder do? Take out his own buildings policy even though there will be a lot of duplication with the freeholder's policy?

FlameCloud

Almost all contents cover provide AA- the Halifax branded ones do, so do the Direct Line et al (Tesco, Churchill etc)- what ones have you been looking at that don't?

mexicanhat

Hi you will get cover under a contents policy but as it is normally a percentage of the Contents Sum Insured it will not be as much as you would get under a Buildings policy

samizdat

OK, obviously I need to go and read some more policy details. I certainly don't recall seeing this benefit trumpeted, i.e. as in "add accommodation cover for only £99", as seems to happen with almost every nuance of cover these days.

The percentage of sum insured thing could be a problem because I would have thought you would want at least a year's cover and probably eighteen months', which could get very expensive. Suppose rent for an equivalent property was £1500 a month, you would need £27,000 just for that and I expect there would be extra bills on top of that such as for uncancellable utilities or council tax. So for between 30k and 50k of contents cover, you would be probably need between 60% and 100% of the sum insured available for alternative accommodation. I shall look into it.

Thanks for your replies.

Edit: Just looked at First Direct because of the 3 months free offer and I note that alternative accommodation is limited to £7,500. On to the next...

samizdat

A quick survey shows:

First Direct: as above (£7500)

More Than: up to 20% of sum insured, which itself has a maximum of £80,000, so max benefit would be £16k.

Tesco (Finest): 30% of sum insured. Can't find any maximum for sum insured.

Halifax: The policy wording is: "The reasonable costs of short term accommodation for you and your family". "Short-term" as a definition sounds a bit limited and also lacks certainty.

So Tesco Finest seems like the best bet out of that lot but the question is if one is really getting good value. If I want £30k of cover for alternative accommodation, I would need £100,000 of contents cover, which would presumably put me beyond the area where companies feel the need to compete on price. I can't face going through a quotation form at the moment but will try to report back any findings here.

dacouch

Most Insurers give cover of 20% of the contents sum insured for the cost of alternative accomadation. In addition so do most building insurers, I'm surprised the free holder has not got this cover on the existing policy as 99% of policies include it for that type of policy and most also include Loss of Rental Income following a damage claim eg a fire under a Residential Property Owners type policy.

Which Insurer has the Freeholder got cover with?

samizdat

Freeholder's insurance is with Royal & Sun Alliance. I am also "surprised".

dacouch

A "normal" Royal and Sun Alliance Policy for this type of risk eg Residential Property Owner (I assume none of it is commerical) would include cost of alternative accomadation following a damage claim. Have they given you a copy of the schedule and / or policy as it should say in there.

P.S It is common to charge extra for alternative accomadtion cover if its a "Commercial Property Owners" policy

samizdat

Could you tell me why I should speak to Ocaso? Presumably because they offer good alternative accommodation cover but that is obviously only one factor. Are there policies good value overall? What are people's claims experiences?

Do you have any personal interest in recommending them?

Lookin at the policy Terms & Conditions for Ocaso reveals:

1. Alternative accommodation limited to 20% of contents sum insured.

2. Damage while property being renovated is excluded.

3. Damage to solid floors is excluded unless the walls are also damaged.

Nothing special it would seem.

dacouch

You will get a similar premium from a UK Insurer such as NU, Zurich etc etc.

Ocaso are a Spainish Insurer and in my opinion are not the greatest Insurer...

As a rough rule of thumb the premium for £100000 of cover under a residential property policy assuming you don't live in a high risk area such as London, the property is not listed, only a small amount of flat roof, normal tenants, normal construction and no claims is a £140 plus Insurance Tax at 5%. This should enable you to scale it up the price up or down. (If its a newish flat with concrete floors you can sometimes get a much lower rate)

P.S I'm impressed you have read the policy, its a shame more customers do not have the fore sight to read the policy so they understand what is covered and what is not covered.

dacouch

What I would I would suggest you do is get a quote with RSA from a Property Insurance Specialist Broker. It will almost certainly include Loss of Rent Cover of 20% of the building sum insured. Get the quote in writing and show it to your boss. As its with the same Insurer he / she should have no problem with transfering to it at renewal.

In the mean time have a read of the policy and schedule for your current policy as you seem to have a good understanding of reading policies