Home insurance query - multiple buildings on same title

tegmim

Apologies for long post, but it doesn't make sense to ask the question without the background.

We own an old 3 bed farm cottage. It has an outbuilding we have nearly converted that will function as an annexe to the house (for us our dependent relevatives) though if we are skint at some point in the future and don't need it for other uses it could potentially become a holiday cottage. The main house is stone but has a section that was added in the 1940s or 50s, which is made of breeze blocks with a flat roof, that contains our bathroom upstairs and our cloakroom downstairs. This section is quite ugly and we bought the house with planning permission to add an extension where the kitchen currently is, and to demolish the flat roof section.

Since prior to the pandemic we have been planning to do the building work to extend and renovate the house (we need extra space as we have two teenage kids and we both work from home) but we felt like we should convert the annexe first, so that we could live in there during any works. Converting the outbuilding into a habitable annexe took hugely longer than expected, plus our builder disappeared last summer just before it was finished, so we haven't started work on the house. However, the annexe is now watertight and has heating that works - we just need the EPC and one or two other bits of paperwork for buildings control - so I have started to get quotes on the work for the main house.

A couple of weeks ago, I needed to renew our house insurance and thought I ought to get a policy that included cover during building work, so I ticked that box on the comparison site. I then bought a policy online that included building work cover, which made it a couple of hundred pounds more than usual. However, the next day the broker phoned me and asked for the contract with a builder required by the insurer (they had a particular requirement for this, but I can't remember what it was, maybe an "RBA standard" contract?). When I explained we hadn't appointed a builder or started work so we didn't yet have a contract, they cancelled the cover, as they told us no insurer would provide a policy with an expectation of building work during the policy term but no contract. They said I would need to buy an ordinary home insurance policy, then when I find a builder I'd need to get the contract with them for the works, then when we have a date for the work to start I could approach my insurer, who would either provide cover or cancel the policy (when I could then shop around for one with the right cover). So I bought ordinary home insurance and contents cover, which started a week ago. However, now that the heavy rain has caused a leak, they say that they don't provide cover to properties with more than 5 bedrooms and consider the fact that the annexe has bedrooms means that we are not eligible for their insurance. So I'll have to decide whether or not to repair the flat roof (and whether to tell the new insurer, if we are self-funding that repair), or whether to progress with the building work (which will replace the roof in that section anyway).

So I'm a bit confused how I can get cover for the multiple buildings, whilst one has not yet got the building regs, and whether it is possible to buy a policy that could include the future building work or not.

Does anyone with knowledge of the insurance world have any advice?

DullGreyGuy

Normally you are required to inform your insurers of any incident, though if you aren't intending to claim this may be able to be just before renewal rather than as soon as practicably possible. Obviously many people who aren't intending to claim "forget" to make such declarations and just hope not to be caught.

The obvious risk is that if the building isn't weather proof then the damage may spread to other parts of the building that you aren't planning to redevelop. The most immediate issue will be the requirement that you maintain your property and not planning to fix a major leak could easily be considered grounds to avoid any claims even if they are unrelated. 

tegmim

Yeah, you are right. Although it is a minor issue and only in the bit we plan to demolish, we have to press on with either repairing the roof or starting the building work.

I'm going to get a start date from the builder tomorrow, and then I'll have a look at the damage and make a decision about whether we need an interrim repair.

tegmim

Well that didn't go well!

When I asked about potential building work, they that if we can viably move into the annexe then we needed to declare having a six bedroom home when we took the policy (which they don't cover) rather than a 3 bedroom home, and we need to also declare if we have any intent to use the property as a holiday let. They said they consider bedrooms to exist from the point that building work starts to add or convert them, so they would expect them to be declared when taking out a policy, even though the annexe hasn't yet been signed off as habitable. They also said that we needed to declare the building work on the outbuilding (even though that happened in 2022-3, before the builder disappeared, and was not on the house).

In summary, they think "the policy is unsuitable and you need to get different cover". It was a horrible experience and reminded me that the whole insurance system is set up to be as narrowly defined and give them as many excuses to reject a claim as possible - even though I didn't want to claim a penny from them.

I think my only option is to get the right contract in place with a builder and then get a new policy for the whole site that includes building work.

It won't cause me any financial loss, as I wasn't going to claim any money, and they'll presumably now refund my whole policy cost as it is still in the 14 day cooling off period. However, I genuinely can't see how I could have known that they'd take issue - we've had eight years of insurance here as a three bed house. When I filled in the insurance questionnaire it asked me how many rooms we had and specifically said "don't include rooms in any outbuildings" when counting, and the house is a three bed. It also said that contents in outbuildings were limited to £5k, which was fine for an empty conversion waiting for sign-off and furnishing. It asked if there was current building work on the house and I said no. And I declared the total rebuild cost to reflect the fact the house and outbuildings added up to more than just the house itself. Surely they ought to say "include any bedrooms, or rooms that could be used as bedrooms, in an annexe or other building on the same title" if this is what they mean?

DullGreyGuy

Your average contact centre agent is on little more than minimum wage and whilst training is substantial compared to many other telesales jobs (the shortest training I had was 30 minutes) it still only covers the top 30 questions someone will ask... thats enough to cover 99.99% of calls but does leave thousands of potential questions that they have no training on, a good one will ask a manager or other referral point (not that managers have any more training in insurance) and a not so good one will answer to the best of their knowledge. 

If the question explicitly said to exclude outbuildings then they would be incorrect to say it's an issue however I suspect you are blurring questions and the Bedroom question was general and the Other Rooms explicitly excluded outhouses. The general rule of thumb is "how would an estate agent market it"? So if you convert a spare bedroom into a home cinema/office it would still be counted as a bedroom when selling it. It's not 100% clear exactly at what stage an estate agent would call a partially converted thing a bedroom but certainly some wouldn't be waiting for building regulations sign off etc. 

Its unclear exactly what the "building work" is that was paused, what state it was in when paused nor if it restarted during the policy term. You ultimately would need to read the policy terms on building work as what is considered it can vary significantly and if its main building or all buildings can also vary. 

Certainly it wouldn't count as a holiday let until such time as it's completed and/or you've started advertising it. I personally wouldn't have muddied the waters by declaring its potential future use unless you want clarity on if the insurer will accept it if it's declared in the future (even then there is no guarantee the answer is the same in X months time when you are ready to start). Many insurers aren't happy with a home business beyond clerical without visitors even if there is another policy involved. 

There are insurance policies out there with very broad terms, Hiscox is written on an "all risks" basis rather than specified perils, it covers your stuff world wide, it also comes with a minimum of £1,200 premium for its basic policy and c£4,000 for its 606 full fat policy. The average person in a 3 bed house is paying £220 and think thats too much hence mainstream insurers cut cover, have tighter definitions etc as this allows them to sell it for a lower price which customers reward with their custom.  

tegmim

I spoke to a team manager earlier this evening and she said that as the annexe has separate council tax, and appears separately on postal address lists, (even if it is on the same title deed) she believes it has no relation to the policy, which was correctly declared as being on a 3-bed house. However, they don't cover properties with more than one habitable building on the same title, so I've had to get a more specialist and comprehensive policy to ensure we are properly covered. I've arranged to repair the leak too!