UK Earthquake Insurance - Make Sure Your Buildings Insurance Covers It!
With all our thoughts over the last month focused on the devastation caused by the earthquake in Haiti, Insurance blogger has investigated the risks to UK homes and property from earthquakes.
You might think that because we do not live in a littoral area of plate tectonic activity, that seismic activity would be minimal, and the risks would be negligible....
However recent trends in the UK have shown the importance of making sure you have this peril covered as part of your basic buildings insurance policy.
On 28th April 2007 an Earthquake measuring 4.3 on the Ricter scale hit the small coastal town of Folkestone in Kent.
The earthquake's shallow depth and proximity to Folkestone resulted in structural damage in the town, and one woman suffered minor injuries.
Following the earthquake, a total 474 properties were reported as damaged with 73 properties too badly damaged for people to return to, 94 seriously damaged, and 307 suffering from minor structural damage. The Association of British Insurers estimated claims to be in the region of GBP30 million. Only 40 percent of the properties damaged were insured!
It was the largest earthquake experienced in the UK since the 2002 earthquake in Dudley in the West Midlands, and the strongest in the active English Channel / Dover Straits region, since a magnitude 4.4 earthquake in 1950.
The strongest recorded British earthquake was the 1931 Dogger Bank earthquake which measured 6.1 on the Richter scale. Shock waves were recorded across the continent of Europe and Tsunamis hit the East coast of Britain and extended as far as Calais in France causing localised flooding and property damage.
The most destructive earthquake on record in the UK occurred in 1884 in Colchester in Essex. In total the earthquake damaged around 1200 buildings and killed five people.
In 2009 Folkestone was shaken by a smaller magnitude 3.0 quake, located in the same area as the 2007 quake.
Depending upon the intensity of the quake and the following effects are typically experienced in UK earthquakes.
European Earthquake Intensity Scale
3 - Felt by few
4 - Felt by many indoors, windows and doors rattle
5 - Felt by most indoors, small objects fall over
6 - People run out in alarm, slight damage to buildings (plaster cracks)
7 - Moderate damage to buildings (chimneys fall, cracks in walls)
In the UK the areas where risk is higher than average include the West Highlands of Scotland, an arcuate zone running from west of the Pennines from Carlisle to Pembroke, NW Wales and W Cornwall. to the East, keny and East Anglia experience the most shocks.
Distribution of Earthquakes and their magnitude in the UK
The places in the UK with lowest seismic hazard are Northern Ireland (especially the western counties), NE England and outlying parts of Scotland, including the Orkneys and Outer Hebrides.
All UK Building Insurance policies cover Earthquakes as a basic peril and inlude total loss cover.
A Quarter of Home Insurance Policies Cancelled As Recession Grips
One in four people have cancelled or not renewed their annual home insurance in order to save money during the recession, according to a recent survey carried out for the association of British insuraers (ABI)
The research carried out by a national survey of over 2,000 adults conducted by YouGov, on behalf of the ABI, also shows that other insurances that are seen as 'luxuries' such as life insurance are also being ditched, as families try to balance outgoings with income, in what is already in most homes a seemingly impossible task.
The survey found the following worrying trends for the UK Insurance market:
Nearly a quarter of people 22% say that to save money in the last year they have cancelled or not renewed their home contents insurance.
More worringly, 17% say that they have cancelled or not renewed their buildings cover, some probably against the terms of the mortgage that usually insists that buildings cover is in place to protect value of the charge on the property.
In Scotland, the figures rise to 28% for contents and 21% for buildings.
13% have cancelled their life insurance.
One in five (21%) say that they are seriously considering reducing or stopping saving. (Well with Interest rates so low - who can blame them!)
This lack of cover is leaving many families even more exposed to their biggest fear in the recession: nearly half (49%) of those surveyed said that they currently worry about their in ability to cope with a sudden event, such as a burglary, accident or loss of employment.
Interstingly, other research found that :
Over half (53%) of women worry about how they would cope with an unexpected event (compared to 43% of men).
And 44% of women are worried about the adequacy of their pension (38% men), reflecting lower pensions among women.
Asked what cutbacks people have or would be making: over two thirds (68%) said that family treats, such as eating out, were top of their list, followed by holidays (56%). Six out of ten women are prepared to reduce spending on clothes and shoes.
Insurance Blogger urges those thinking about cutting back on home insurance cover to consider what would happen if their house was burgled or flooded? With rising crime and rising floods a couple of hundred pounds on a home insurance policy might seem small beer if the worst occurs. Shop around for home insurance on the Internet or visit a specialist home insurance provider for an array of good deals at the current time. Similarly if it's not too late think about purchasing some lifestyle protection insurance if you are worried about your future
Buildings Insurance Claims Crisis - Sewage is the New Subsidence
Buildings Insurance is in the proverbial again with what could potentially turn out to be the biggest claim reason since the subsidence crisis of the 1980's and 90's.
The reason? Sewage - or more precisely the sewer mains pipes that lead from every property in the UK to the main street sewage system.
In the 1950's through to the 1970's a certain type of sewage pipe called a 'Pitch Fibre pipe' was widely used in new and existing construction work as a replacement for clay pipes which were three times as expensive and required specialist installation. Published figures from the time suggest that "if laid correctly, and not subject to adverse ground conditions, pitch fibre pipes can be expected to have a design life of up to 40 years". If poorly installed, it was suggested that the life expectancy of a pitch fibre pipe would be significantly shorter.
All Pitch Fibre Pipes laid for sewerage in the UK have now reached or passed their design life expectancy.
Pitch Fibre Pipes were made from wood fibre impregnated with coal tar, and have performed adequately when dealing with normal waste water. It soon became apparent that Pitch Fibre pipes were susceptible to the delamination of their inner surface, ruining the structural integrity of the pipes. Pitch Fibre pipes have been found to react badly when subjected to large quantities of hot water, and to oils and fats, which can soften the tar and cause deformation and leaks. It was also discovered that under normal conditions, they were susceptible to collapse under applied loading, sooner than pipes made of more rigid materials. The use of pressure washing drains has also exacerbated the problem of deterioration.
Pitch Fibre Pipes (incredibly) were British Standard approved (BS2760), although this was withdrawn on 15 June 1987.
Home Insurance claims Nemesis
The use of pitch fibre pipes was very widespread through the UK and up to 50,000 properties are now suffering problems relating to pitch fibre pipes every year and making claims on home buildings insurance policies. The number of Pitch fibre claims is rising dramatically each year so much so that, like subsidence, many Home Insurance companies are refusing to cover claims under buildings insurance for sewer collapse associated with pitch fibre. Many others will claim 'normal wear and tear' and refuse to pay a claim. Howerver following advice from the UK's Insurance Ombudsman’s , some Home Insurance Companies are now paying for these drains to be repaired.
Would you know if you had Pitch Fibre Sewers? Probably not until you have a blockage or leakage.
Insurance Blogger is warning the large number of people who compare home insurance premiums on the Internet and change provider each year, to check very carefully if the new policy covers Pitch Fibre Collapse.
The cost of replacement of pitch fibre piping with modern materials can be anything from £2000 to £10000 or more depending upon the length and complexity of the run and the surface materials. You may be jointly liable for damage to pitch fibre sewage pipes that are not even on your property if your sewers join to neighbours, so it is oimportant when purchasing home insurance that pitch fibre is covered, otherwise you may be presented with a large unwarranted bill.
As the pitch fibre pipe systems gradually deteriorate, those responsible for the sewers find themselves frequently paying out for repairs. Check your pipes and home buildings insurance today!
With the direct big boys slugging it out on UK National television to give away free contents insurance(with T's and C's), on the back of the buildings insurance cover, it was not long before the other big direct player Direct Line got involved.
The RBS bank owned (should I rephrase that to read 'and British government'), has jumped into the affray with an offering of 50% off the cost of contents cover.
OK so its not as much as the other two, but has still got be worth a quick quote to check out the premiums and the various difference in home insurance cover offered. One has to assume that the buildings rates for both More Th>n and Norwich Union are inflated to cover the risk pool created by all that extra contents cover.
What makes Direct Line Home Insurance a good deal better? Well according to Direct Line • Up to 25% discount when you buy online & Up to 50% off of Contents cover • 12 months cover for the price of 9 • New for old replacement items for the garden, up to £1,000, as well as in your home • Where possible, we'll arrange the delivery of replacement goods direct to your door • Automatic increase in cover over Christmas and for weddings - £5,000 or 10% of the contents sum insured, whichever is greater • Cover for accidental damage to PCs and TVs and home entertainment equipment as standard • Children's content covered whilst they are away at University up to £5,000 (or 15% of the contents sum insured). • Unlimited frozen food cover • Bicycle covered as standard when left indoors, in a shed, garage or outbuilding • Includes cover for replacement locks • 24 hour emergency helpline for all customers
Big Freeze - Check your Buildings and Home Insurance
Online buildings insurance advice centre building-insurance.net is advising clients, particularly those who may own a second home, are currently working way or are away on holiday, to get a friend or neighbour to check their properties for burst pipes.
Water Damage is the number one claim at this time of the year. after a week of sub zero temperatures, now as the freeze subsides is the time that most damage occurs when the water pressure is allowed to build up. Home Insurance companies across the country are currently inundated with claims related to last weeks big freeze.
You can avoid a lot of extra damage to your buildings and contents if you take a few precautions regarding frozen pipes.
Get the pipe properly lagged Uninsulated pipes exposed to freezing temperatures can cause water to freeze inside them.This can result in burst pipes once the water thaws so make sure all pipes particularly external ones are lagged. Make sure tanks and pipes within the loft are in good condition and well lagged. If going away for work or holidays during the winter months maintain gas and electric central heatings at a low to moderate level. In the event of a burst pipe, turn off the mains water stopcock. Its advisable to know the location of this beforehand but itis quite often found underneath the sink, in the bathroom,below the stairs or possibly low down or in a cellar. If your own water supply is pumped up from a well or ground, switch the sytem off until you have checked the ice level.
Make sure your Home Insurance has provision for both burst pipes and other big freeze contingency covers. Many of the best home insurance companies have 24 Hour Household Emergency Helplines who will be able to help with all thing plumbing related. Check your policy document to make sure your existing home insurance covers all these risks and if it doesn't we advise you to shop around as there are some great deals to be had in the UK Home Insurance market at the current time, including many offering free or half price contents cover
So I sat around on the early part of New Years Eve thinking about 'What on earth to write of interest' about insurance in the UK as we enter 2009. No I didn't, I'm not that sad! but I couldn't help but notice the massive TV ad campaign being run by Norwich Union offering free contents insurance up to £50000 if you buy your buildings cover through them. Well that made me sit up and think - What? and Why? The focus of Home Insurance over the last few years, especially sales on the Internet from many of the major brands have been the opposite, offering unlimited building SI's cover to attract the contents cover. So OK blanket unspecified covers up to 50k of contents, but surely the buildings rates have got to reflect the difference? I haven't tested the premiums yet but maybe NU are selling it cheaper? So why are they doing it? Well obviously to target a specific sector and increase their book of home insurance business. Maybe they think people will be cutting back on contents insurance during a recession as a luxury item not imposed by mortgage or other conditions upon homeowners. Most likely they think that all that bank buildings insurance business is up for grabs!. Perhaps this is the final stage of NU becoming a totally direct insurer before it becomes rebranded as Aviva (soon to be!! - have you seen those stupid ads all over London?). I suppose they're also finding it extremely difficult trying to sell their traditional products in this market and think Home Insurance is a soft touch...hmmmm.
So anyway I thought no more of it and carried on drinking and then at the next commercial break - flying pigs? Nope. Just More Than giving away contents insurance for free and guess what - up to £75ks worth.
At least the More Th>n offering seems to make good business sense. £75k is the bottom end of the high net worth contents and home insurance market and the large buildings will pack a fair premium with plenty of opportunities to cross sell to the HNW clients. Does one size fits all work in the UK home insurance market? Others will probably have jumped on board the free contents insurance band-wagon before I've finished this article, but we remain sceptical until we've checked out the devil in the detail. Let us know your thoughts!
At insurance blog we think if you're a high net worth customer you are more inclined to seek specialist and personalised home insurance cover. That's why we recommend you take a look at Hiscox Home Insurance before you renew or move from that annoying bank.
Hiscox Home Insurance is comprehensive and specifically designed for people with higher value homes and possessions.
When choosing home insurance a customer can feel certain with Hiscox because:
• No policy available direct has better cover, as standard • Hiscox is a solid and trusted company, dating back to 1901
Great reasons to choose Hiscox
1. Hiscox home insurance has been awarded 5 stars from independent market researchers, Defaqto, for the third year running 2. Hiscox are one of the few direct insurers offering 'all risks' cover, meaning minimal exclusions, maximum cover 3. Contents covered inside the home and when temporarily away anywhere in the world 4. Buildings cover automatically includes accidental damage 5. No need to list every valuable on your policy worth more than £1,500 6. 24 hour emergency cover (e.g. for blocked drains).
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