House insurance should always be at the top of your to-do list in the house buying process – but how do you go about protecting one of your biggest investments? It can be overwhelming knowing how to get the best insurance – or even understanding what goes into creating your insurance policy.
To get a better idea of the home insurance process, I spoke to Kane Butler – Company Director and General Manager of Distribution and Partnerships at Wayne Grayson and Associates and Fire and General Specialist for Trebla. He’s been in the business for 24 years so knows the ins and outs of both sides of the process!
What factors will impact your house insurance?
Insurers will pay attention to the whole property when deciding on an insurance policy, but their criteria focuses on a few things in particular.
“Probably the first one is the condition of the house,” says Kane. “If the house itself is rundown, or needs a lot of work, then the insurers are going to be a little apprehensive to take it on.”
An insurer will also consider whether the property is on town or tank water, its weather-tightness, the house’s location and its age. While it doesn’t mean an old house or a house on tank water is uninsurable, these factors can all have an impact on the cost of insurance.
Unconsented works are another consideration. If a house has any unrecorded work done, then there’ll certainly be some questions about the robustness of the home. To find out more about unconsented works, have a read of our last blog on DIY jobs and building consent.
You can get an idea about your potential home and the factors that may make insurance more expensive through a property inspection. A property report will help you know even before approaching a broker if the house’s insurance is likely to be too expensive for your budget. Arranging a property inspection before committing to any policies means you can avoid the cost of signing a sale and purchase agreement and doing due diligence, only to find your insurance will be too expensive.
Some insurers are more strict on certain things than others, which is why it’s best to assess all your options and ask the experts before committing to one policy in particular.
How do insurers assess a property?
To understand and assess a property, insurers often have systems in place to access information. Software allows insurers to easily plug in most addresses and immediately be able to see all the latest building information. Generally, they won’t go out and see a property in person unless there’s a really specific reason – they’ll get the majority of details they need from records or from the client.
Is a house ever uninsurable?
It’s very rare that a house is ever completely uninsurable. In the last 12 months, Kane can only recall two situations in which a house has been rejected from cover entirely. Often, the properties that are rejected already have existing claims on for landslides or leaky buildings.
If a home does have a problem, the insurance premium won’t necessarily increase. Instead, the cover may be restricted. A house that’s had a previous landslip, for example, might be insured without landslip cover. Alternatively, the insurance policy might place a higher excess on the property.
“We can generally get around problems and get the house covered,” says Kane. “If there are problems with a house, then there are normally other policies we’ve put in place where there might be a restriction, endorsements, or warranties.”
“Because of the relationships that we have with insurers, it’s easier for me to have a conversation with one of them and work out a solution. If someone was going directly to an insurer, they would have a lot more trouble than what we do.”
How do I get the best insurance policy for my home?
Put simply – talk to an expert.
“It’s a broker’s job to help get the right insurance for you,” explains Kane. “Knowing how to talk to insurers and negotiate a deal is a big thing, which is what an experienced broker is an expert at.”
Additionally, price should never be the only consideration when deciding on insurance.
“A house is the biggest asset you’re ever going to purchase, so why would you not insure it properly? For a few hundred dollars more a year, you’re better off making sure you’ve got the best cover around. There are differences in cover out there, and they can make an even bigger difference when you have a claim.”
Never try and tackle insurance alone – it’s always best to stick with the experts! Insurance brokers like Kane can always ensure you’re getting the best coverage for your particular property. No property is stock standard, so why would you settle for stock standard insurance?