This year, several thousand Britons will purchase holiday homes abroad. With prices for overseas properties rising steadily, it is essential to obtain sufficient home insurance for your holiday retreat. However, obtaining insurance for overseas properties can often be a very confusing process. Here are some tips to help you protect your ‘place in the sun.’

Examine all the options available when purchasing holiday home insurance. Insurance may be obtained either through a local insurer or via a provider in the United Kingdom. UK insurers will invariably be more expensive than foreign providers. However, unless you are fluent in the local language, obtaining insurance abroad can become a hassle. Roy Thomas of the broker, Andrew Copeland International explains: “If getting a cheap policy is a priority then insuring locally will be the way to go, but the cover is often nothing like as comprehensive as you will get through a UK insurer. Often flood, subsidence and earthquake damage will be excluded in a local policy, as well as cover for tenants – and the levels of cover are usually lower. Language barriers can also cause problems, as well as the question of what to do if things go wrong with a claim and you want redress.” As such, a UK insurance firm which has experience when it comes to dealing with local laws, taxes and government red tape is a sensible alternative.

Not all insurance providers offer holiday home cover for those properties located in less traditional destinations. Whilst most major insurers provide cover for properties located in Western Europe and other popular destinations such as Dubai, Bulgaria, Croatia, and Cape Verde, many locations particularly in Asia, the Caribbean and the former Soviet republics are not covered by UK home insurers. According to John Maxted of insurance broker Howe Maxted, this has a lot to do with the risks of holding property in the country concerned: “…We used to insure in the Caribbean, for example, we don’t anymore as everything would get blown away in hurricanes and it was too expensive for us.” Therefore, when choosing an insurance policy, make certain that it provides protection against local hazards to property. For example, if you have recently bought a home on Florida’s Gulf coast, it is vital that your insurance policy covers hurricane damage.

Finally, be sure to have a policy in place before you come to exchange contracts on your new home. Most estate agents will want to see a copy of the policy before finalizing the sale.

Choosing the best holiday home insurance policy can be a complicated and confusing process. Luckily, there are a number of organization which will be happy to provide you with impartial advice and assistance. A few are listed below.

Andrew Copeland International
Telephone: 44 208 6568435
Official Website

HiFX
Telephone: 0800 856 3424
Official Website

Howe Maxted
Telephone: 44 208 3091717
Official Website

In addition, the of the British Insurers Brokers’ Association can help direct you to insurance companies which provides cover for foreign properties.

In a worrying development, there are fears that many homeowners may be denied the opportunity to obtain home insurance because they live in areas that are prone to flooding due to poorly maintained flood defences. In a survey by the National Audit Office, a staggering 50% of linear defences and 49% of flood defences are in disrepair thus leaving whole regions susceptible to flooding during periods of heavy rainfall. Conditions vary between different regions. In the southwest, for example, a mere 18% of flood defences are in an acceptable condition. Given that there are some 2.2 million properties located in regions which are at risk from flooding, obtaining sufficient home insurance is essential. This, as Malcolm Tarling from the Association of British Insurers (ABI) pointed out, can often be a very difficult process for homeowners: “If the area (where the individual lives) does not have adequate flood defences in place, homeowners will find it difficult to get insurance, as there is no obligation to provide cover.”

Under these circumstances, what can you do to try to obtain home insurance if you live in a region vulnerable to flooding? Here are a number of useful tips:

• First, evaluate the quality of local flood defences. You can do so by typing your postcode into the website of the Environment Agency which will provide you with a map highlighting high risk regions. Alternatively, you can write to the Environment Agency – the department can provide you with details about the quality of flood defences in your region. You will have to pay a fee of £25 for this service. If defences in your area are maintained to a high quality then you should have little difficulty obtaining home insurance.
• Contact a number of insurers when buying home insurance. Just because one insurer denies you cover does not mean that others will necessarily do the same. It is vital to do your best to obtain insurance for your property. Failing to obtain home insurance is likely to reduce the value of your property substantially. According to Halifax, one of Britain’s largest lending agencies, “Householders who cannot get building insurance will not be able to get a mortgage.”
• Do your bit to make your home more flood resilient. This will make insurers more willing to grant you a policy. You could, for instance, have your floor tiled rather that carpeted. In addition, it might be wise to install door boards to keep out flood water. Having electrical sockets installed at higher points on your walls will prevent them being damaged during flooding; it will also make your home more child-friendly.

If you are finding it difficult to obtain insurance for your home or are having problems dealing with the paperwork, then there are a number of organisations that can provide you with impartial advice and assistance. These include the National Flood Forum (Telephone: 01299 403 055) and the Telegraph Insurance Services provided by Cornhill Direct (Telephone: 0800 10 70 500).

Torrential rains in Yorkshire and the north-eastern parts of the UK have left much destruction in their wake. Particularly hard-hit have been home-owners who must now face the prospect of reconstruction and filing insurance claims. Whilst many insurance companies have set up special help lines for flood-hit property owners, making an insurance claim can still be a rather complicated process. There are also a number of key issues that you should bear in mind if you have been a victim of the recent flooding and have suffered damage to your property.

• Firstly, it is vital to inform your insurance provider as soon as possible. This will allow them to deal with your situation quickly and thus provide you with the relevant advice. It is likely that your provider will have set up a 24 hour helpline to deal with the large number of worried home owners seeking assistance. (Nationwide, for example, has set up such a hotline which has received over five hundred calls from affected property owners.)
• Whilst it makes sense to carry out essential repairs, ensure that you only engage in the more complex repairs after receiving the go-ahead from your insurance provider. Otherwise, you might find yourself in the undesirable position of having to foot the bill for these repairs yourself. Also ensure that you keep all the receipts for the repairs you undertake.
• Move your valuables to a safe location in your house (for example, the upper floors). Do not dispose of any furniture unless your insurance provider has acknowledged the damage and agreed to compensate you for your loss.
• It might be wise to check with your insurance provider as to whether it is possible for them to move you to an alternate location. In certain cases this might be part of your home insurance policy.
• Finally, remember – safety first! Do not consume tap water unless you have been told that it is safe to do so by your local authority. Do not turn on the electricity or gas – be cautious about potential gas leaks.

Once the flood waters have subsided, there are a number of tasks you need to undertake to make your home more habitable.

• Heavy rains can cause corrosion. It is therefore advisable to oil locks and hinges.
• You will also need to dry and air your home to prevent the growth of mould and fungi – these flourish in damp environments. Also leave your windows and doors open to bring some fresh air into your home.
• Once you have obtained the approval of your insurance company, disinfect your home, washing down affected walls and surfaces.

Finally, even if you have not been hit by flooding, it might be an idea to go through your insurance policy to ensure that you are aware of its terms and conditions. As the experience of flood-hit home owners demonstrates, there is no telling when the worst could happen – it is therefore essential to be prepared.

Although it charted a rapid rise in the cost of car insurance premiums to record levels, the AA Insurance British Insurance Premium Index has revealed that home insurance premiums fell during the second quarter of 2007.

The insurance provider’s research indicates that average indexed premiums fell slightly for both buildings and contents insurance polices, as heavy discounting cancelled out recent small increases and reflected the “continuing competitive market for home cover”.

During the first three months of 2007, the index of average quoted premiums for buildings cover fell by 1.89% to £206.88, enlarging the year-on-year reduction in premiums to 0.20%. The ‘Shoparound premium’, an average of the lowest three premiums on the market for each risk category in the index, fell by 3.45% to £135.72.

Similarly, home contents cover saw a 1.32% reduction in the index of average quoted premiums, which fell to £147.14. In this highly competitive market, competitively priced quotes drove premiums to a 3.22% reduction year-on-year, while the Shoparound premium fell by 3.37% to £81.80.

Kevin Sinclair, managing director of AA Insurance, said: “Home insurance represents particularly good value having changed little over the past decade. Things have never been better for customers in terms of choice but make sure you’re comparing like for like and not just price for price.”

Impact of elevated flood risk on premiums

The recent flood activity around the UK has prompted fears among homeowners that home insurance premiums could climb swiftly as insurance providers re-calculate their weather based risk assessments.

Environmental risk management firm Ambiental claimed that insurance companies will consider removing flood cover as standard from their fire policies if the government fails to significantly increase funding for flood defence.

The Association of British Insurers, meanwhile, has placed increased pressure on the government to develop an effective strategy to cope with future climate change by publishing a climate change ‘adaption manifesto’ which calls for immediate action.

However, Mr Sinclair said it was unlikely that the recent widespread flooding would signal an immediate increase in home insurance premiums.

“It will take a sharp increase in the number of extreme weather events of the sort we have seen in Yorkshire and the Midlands to have an impact,” he said.

“But I am concerned at the number of people counting the cost of the recent floods who say they had no contents cover while many industry experts believe that up to two thirds of those who do have cover are under-insured.

“Recent events show that severe weather can affect anyone, so while premiums remain low, it would be a good time for people to review their home insurance.”

A quarter of British adults (8.5 million) have chosen to ‘Buy Now, Lie Later’ in the last 12 months, hiding the real cost of purchases from their partners and family, according to a new survey from Halifax Home Insurance.

The home insurance provider found that these secret spenders played down the true cost of their purchases by an average of £772 over the last year. Altogether, this equates to a national deficit between the real price of purchases and the stated price of more than £6.5 billion.

While women were most likely to lie about the price of clothes and shoes, the survey confirmed that men mostly lied about the cost of electronic gadgets. Four out of every five women (80 per cent) who lied about the price of a purchase in the last year, did so about the price of clothes, while 41 per cent of the culprits lied about the price of shoes. Although 41 per cent of men lied about the price of ‘boy’s toys’, such as a PlayStation 3 or an iPod, 33 per cent also hid the cost of clothing from their partners.

Half (51 per cent) admitted that they hid the real cost of their purchases because they did not want their significant other to think of them as careless with their money, but 34 per cent distorted the truth in the attempt to maintain an illusion of thriftyness.

Nearly two million Brits refused to admit the truth because they feared their partners’ reactions, while one in ten were so embarrassed at their own spending that they lied to save face. A number of Britons attempted to deny altogether that they had made a purchase, until incriminating evidence such as receipts, price tags and credit card statements appeared.

“Men and women are divided when it comes to their secret spending,” said Vicky Emmott, senior manager of underwriting at Halifax Home Insurance. “While women return from shopping trips pretending they have secured a bargain price for their Manolos and Jimmy Choos, men hide the price of stereos and plasma televisions.”

Secret spenders risk being underinsured

It comes as no surprise that there is so much financial secrecy when Abbey Current Accounts reports that 7.5 million Brits keep an entire current account hidden from their partner.

However, people who lie about the cost of their purchases have more to worry about than just their partner’s reaction. They also risk being underinsured on their contents insurance, which could become a significant problem if they ever need to make a claim on it.

Ms Emmott explained: “Because of this secret spending, householders could find the contents in their home are underinsured if the person responsible for organising the policy is unaware of the true cost of items in the property. Homeowners can seek to avoid this problem by purchasing unlimited contents insurance for their property. However, they will have to own up to the real cost of the items when claiming on their insurance policy.”

According to the Association of British Insurers an estimated 27,500 homes were damaged in the floods which recently hit Yorkshire and parts of the Midlands, and the cost to insurers is expected to be in excess of £1.5 billion. It is a nightmare scenario to see your home devastated by flood waters but the misery is compounded if you are uninsured. Many people see home insurance, particularly contents insurance, as some sort of luxury or optional extra. In fact Abbey Home Insurance estimate that with around 25% of home owners having this attitude, some 5,000 families may find themselves wishing that they had insured their homes. In the days after the floods, applications for insurance rose by 300% in places like Hull and Sheffield and it is reasonable to assume that these applicants are those who have learned from their neighbours’ misfortune.

According to the Environment Agency 2.3 million homes are built on flood plains and insurance companies are seeking information from the agency to see whether their black list of uninsurable properties should be increased. At the moment over half a million homes and businesses are uninsurable as they are at risk of being flooded more than once in every seventy-five years. An agreement was reached in 2002 between insurers and the government that cover would be given to home owners with properties on flood plains so long as defence systems were either in place or planned. Currently that agreement is being adhered to although in many other countries home owners are less fortunate; flood cover is often not included in the standard home insurance policy and is very difficult to obtain, even as a separate policy, if the risk is deemed too high.

insurancewide.com advises householders to check their insurance policies carefully, including all the small print and offers the following tips:
Before a flood

• Turn off gas, electricity and water supplies at the mains
• If you have time, move all items of sentimental value to a safe place
• Again, if time allows, move what you can upstairs and raise heavy furniture on bricks to minimize damage

During a flood

• Be aware of the risk posed to health by flood water contaminated by sewage
• Follow instructions from the emergency services and do not wade through high flood waters

After a flood

• Contact your insurance company as soon as possible on their 24 hour emergency number
• Keep a record of all damage including, if possible, photographs and/or video footage
• Do not turn your gas, electricity or water supplies back on before having them checked professionally.

For further advice on coping with floods visit the Environment Agency website and remember to keep a note in a safe place of which company you are insured with since you may well be evacuated in a flood and be unable to return home to obtain the information (supposing it has survived the event). One way round this is to e-mail yourself the policy number and contact details for your insurers.