Buildings and Contents Insurance (Home signed over by parents)

SimonW145

Hi, my parents have signed over their home to both myself and my sister.  This has all been completed legally and my parents will remain in the home.  Their current insurer Direct Line did charge them £258 for both home and contents insurance under the FloodRe scheme as their home is near a river, but the home hasn't flooded (only the separate garage) in 2007.  When I telephoned Direct Line they said to reinsure the house with seperate building and contents insurance would be nearly £760!

I explained that nothing other than ownership has changed and the risk remains the same, same house, same occupants, same location but they would not budge.  I have contacted a local insurance broker and they are coming back with similar premiums due to it being near a river.  Has anyone any experience in resolving this in these circumstances and if so which insurers did they approach to get a realistic premium?  Please help!!

DullGreyGuy

Are you trying to insure it as the non-occupying owner? If so are you looking at Home, Landlord or Second Home insurance?

Are your parents trying to insure it as the non-owing occupiers? If so how are they answering the question of their relationship to the property? Private Tenant or ? How have you created the insurable interest in the property?

PS. FloodRe is an example of reinsurance, you are trying to buy insurance not reinsure it  

Aretnap

FloodRe is essentially a system of subsidies designed to make it possible for people in flood risk areas to get affordable insurance - but for it many people in areas like your might find insurance very expensive if not unobtainable.

AIUI only owner-occupiers benefit from FloodRe. Landlords, businesses and so on are presumed to be able to pay the full market rate for insurance - or at least not to need their profits subsidising by a levy which is ultimately paid for by other customers. By owning a house that you don't live in you and you sister seem to have inadvertently put yourselves in the "landlord" section of the market - whether or not you actually charge your parents rent.

So the reason the premiums have gone up isn't because the insurer sees the house as higher risk than previously - it's because as owner occupiers your parents were eligible for a big subsidy on their premiums, which is now no longer being applied.

As an aside what are your parents hoping to gain by signing ownership of the house over to you? If the aim is to avoid inheritance tax or to claim council funding for care fees in future I assume that they're aware that it's not as simple as "just sign the deeds over to your kids" and that they've taken professional advice on the matter?

mr_stripey

After my dad passed away (which coincided with my divorce) I moved into his old house whilst we sorted out probate etc. When it came round to insurance renewal I could not claim to be either an owner or a tenant, or indeed any other of the "options" on standard insurance. Had to use a specialist insurer which cost loads more (even though the perceived "risk" was unchanged, perhaps even less) - but it is what it is. If you can't fit neatly into a standard insurance "box" then it's going to cost more.

Grumpy_chap

[Deleted by Forum Team]

I understand your comment and it may often be the case that issues around IHT, DoA, CGT, benefits, SDLT create complexity that is not initially considered.

However, the OP states this was all signed over legally.  One has to assume that in that process both the parents and the offspring had legal representation so all the potential pitfalls were explained and, having considered all the elements, everyone remained of the view this was a sensible thing to do.

If it has all been done, then the concerns you alluded to are quite likely moot.

With regard to the insurance, I suspect the offspring will need to take landlord policy for the buildings and the parents need tenants policy for the contents.

SimonW145 said:

Hi, my parents have signed over their home to both myself and my sister.  This has all been completed legally and my parents will remain in the home.  Their current insurer Direct Line did charge them £258 for both home and contents insurance under the FloodRe scheme as their home is near a river, but the home hasn't flooded (only the separate garage) in 2007.  When I telephoned Direct Line they said to reinsure the house with seperate building and contents insurance would be nearly £760!

I explained that nothing other than ownership has changed and the risk remains the same, same house, same occupants, same location but they would not budge.  I have contacted a local insurance broker and they are coming back with similar premiums due to it being near a river.  Has anyone any experience in resolving this in these circumstances and if so which insurers did they approach to get a realistic premium?  Please help!!

SimonW145

In order to close the thread, I have now arranged insurance with full flood and accidental coverage with separate building and contents cover.  The cost was only a few pounds over what was being paid originally so very happy with the result.