Introduction | Homeowners
| Buildings insurance |
Contents insurance | Level of cover
| Costs of cover |
Choosing a policy | Making a claim
| Tenants insurance | Landlords
insurance
Levels of COver
Extensions
The new craze for DIY means that more and more UK homeowners are
extending their properties and adding such things as loft conversions
rather than moving to a new home. But according to research, the
‘up-not-out' generation may find that their insurance cover
no longer fits their new-look properties.
The widening rungs of the property ladder, where property price
inflation has persistently outstripped building cost inflation,
means that the cost of extending a home has become significantly
cheaper compared with moving out. In many UK cities, the difference
moving or extending can be up to £30,000 when legal costs,
stamp-duty and removal costs are taken into account. However, homeowners
who decide to stay put and extend their home often fail to review
their cover, and sometimes fail to make sure that their home insurance
cover has kept pace with the changes they have made.
Homeowners who have not taken changes into account may have a problem.
An examination of some of largest Insurance companies shows that
only a small number of building insurance policies have the 'peace
of mind' which unlimited sum insured offers. Some buildings insurance
policies only cover a specific sum insured and, as such, they may
not cover all of the claim in the event of total loss.
Many people extending their property are required to notify their
insurer not just of improvements that add either additional bedrooms
or garages to the property, but also kitchen extensions, living
room extensions or conservatories. There may well be a premium increase
in light of the increased cover.
Further reading on levels of cover:
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