Possible to insure a house ONLY for fire and theft?

moneyistooshorttomention

I am asking on behalf of a friend.

She has owned her house for many years and paid "normal" level insurance premiums for standard "normal" house insurance all this time with no problem.

On going to renew her insurance this year she was told her insurance premium had now rocketed to 6/7 times the level. I had long feared that the fact her house is on level ground very close to a river might cause her an insurance problem at some point and this is now happening.

It should be possible for someone to take out a "lower tier" level of insurance cover on their house. That is for "fire and theft only" and pay a reduced rate compared to full "normal" house insurance. I have suggested to her that she forgets about having full "normal" cover and just pays for "fire and theft" cover only. With that, she would avoid this huge increase in insurance premium and should, in fact, pay less than "normal" insurance costs.

Do insurance companies actually have "fire and theft only" insurance cover deals available? If not, does anyone know if there are currently plans/proposals in motion for this type of insurance cover to be made available to people in this sort of position?

The situation is similar to cardriving insurance. That is, whether people want to pay for the full "normal" car insurance or only for "third party" insurance. Hence I would imagine there must be a "second tier" type of house insurance available for people who can't afford to pay a "flood plain rocketed-up" insurance cost for "normal" level house insurance.

Idiophreak

Insurance premiums are driven by statistics...so your friend can assume that it's much more likely her house will be flooded than set on fire.

Why would she not want to insure against the high likelihood of flooding, but against the lower likelihood of fire?

Basically, if she's willing to risk paying out if something quite probably happens (a flood), then she should be willing to risk paying out if something less probable (a fire) happens - so just not bother with insurance at all.

I imagine the house being subject to theft is the least likely - although I suspect you were referring to theft cover for the contents, not the building?

moneyistooshorttomention

Yes indeed. I do mean theft and fire cover for the possessions and fire cover for the building.

My thoughts are for her to "self insure" against flooding. That is, have enough savings to one side to cover herself for any possible flood damage. Obviously, if there isn't ever any flood damage then she would not have wasted money paying out this hugely increased premium just in case...

There will be some other people in a similar situation who CAN only afford to pay the level they do now for insurance cover and cannot pay a "rocketed-up" premium or have savings set aside "in case". These people will still have to have their fire and theft cover, but will just have to do without their flood cover and keep their fingers crossed that situation won't ever arise.

mrginge

I'm not too sure that a mortgage company would be happy to their security effectively uninsured.

Mrs_Imp

When I lived in a flat the freeholder only insured for fire. Even then he wasn't keen. My mortgage company insisted on insurance, but he owned his flat outright.

hazyjo

You'll probably find that if a property was on fire, it's the water damage from the hoses trying to put out the fire that would cause more/equal damage!

I had my kitchen ceiling fall in after a tiny slow water leak from a hot water tank in the bathroom above. You wouldn't believe the damage and hassle - joists needed replacing, others needed drying out with a dehumidifier, etc. All of the kitchen needed repainting, new ceiling, etc.

Really don't see the point of trying to save what would probably only be no more than a fiver a month on insurance. I only pay £28 a month for buildings and contents, and that's on a fairly large house.

Jx

giraffe69

On going to renew her insurance this year she was told her insurance premium had now rocketed to 6/7 times the level.

So if she goes to a comparison site are they showing that all companies want 6 to 7 times her last renewal? Maybe time to move.

Increasing the excess may also mean a reduction in the premium.

rpc

moneyistooshorttomention wrote: »

My thoughts are for her to "self insure" against flooding. That is, have enough savings to one side to cover herself for any possible flood damage. Obviously, if there isn't ever any flood damage then she would not have wasted money paying out this hugely increased premium just in case...

The premium has increased because the "just in case" is more likely and insurers are now properly adjusting for this. If she really has enough to cover the rebuild cost of her house and money to replace all her contents, why not self-insure against all perils? The cost of total loss due to flood is unlikely to be much higher than total loss due to fire.

Premium is, as a grossly simplified example, probability x cost. The cost of a flood stays the same, but the probability has been calculated to be higher.

Does she have a mortgage? It will be a condition that buildings insurance is in place.

If we hadn't concreted over all of our flood plains, we'd have a lot less problems! It wouldn't stop flooding, but it would reduce.

pinkteapot

Re self-insuring, my parents' claim after a flood ended up totaling £40k, and their house only had 3 inches of water in it and they didn't have loads of expensive contents ruined.

rpc

pinkteapot wrote: »

Re self-insuring, my parents' claim after a flood ended up totaling £40k, and their house only had 3 inches of water in it and they didn't have loads of expensive contents ruined.

It can easily happen. Water damage is EXPENSIVE.

moneyistooshorttomention

Perhaps I should have clarified. The fact that my friend has had her house for quite some time now means the mortgage has been paid off. Thus, no mortgage company is there demanding (understandably) that the property is insured.

The increase in premiums is very noticeable to someone on a low income and is due to be around £80-£100 per MONTH. This is obviously too much for her to reasonably be able to pay.

I'm not actually even that sure as to whether she has sufficient savings to be able to cover the cost of any flood damage that may happen if she wants to.

My thoughts are that she will still need to have her fire and theft cover and I can't see that the risk of having to claim on those two things will be any different at all regardless of whether a house is or isnt on a flood plain. The area is averagely "safe" as regards possible theft and therefore needs theft cover. The house is a terrace house (rather than detached) and therefore the need for fire cover is greater as (no matter how careful she is) a fire might spread through from a neighbours house and affect hers and therefore she still needs fire cover.

I thoroughly agree with rpc that we should not have concreted over flood plains. In defence of this particular road, the houses in it are over 100 years old and therefore were built before this particular problem became widespread.

So, this all boils back down to I can't see how my friend can do anything about potential flood damage other than pay an insurance premium which would be literally hundreds of £s a year more than a "normal" level one on the one hand OR get insurance cover for "fire and theft" only and cross fingers there won't be a flood on the other hand.

Hence my question as to whether its actually possible for a householder in this position to insure themselves JUST for "fire and theft" only and pay a "normal level" (minus deduction for NO flood risk) premium and ensure that they are at least still safely covered for these other two risks.