Week 45: Here we go again...and Insurance anyone?
While the country should've been celebrating Guy Fawkes Day on the 5th of November, instead we find ourselves in the midst of yet another national lockdown. This is supposed to be a short one which should ease off by Christmas but I wouldn't hold my breath. I have previously celebrated some religious festivals during lockdown so this should be a breeze. Galz stay on top of your dailies/beauty rituals etc and guys for heaven's sake don't grow your beards so long this time as this quarantine is fairly relaxed compared to its predecessor. Social distancing rules still apply however, major businesses will still be operating with full measures in place. Construction, renovations, home buying/selling, viewing/valuations and estate agencies are all good to go and have been given the green light to continue. The bad news; expect shortages of labour, materials, supplies, interruptions and of course inevitable delays. If you factor these in then there is no reason why you can't continue your property business as normal.
Tip: Enjoy the quietness, with fewer distractions from your social life make more time to focus on your plans and all things property.
Recently, I have been looking to purchase some insurance as I have my eye on a property which will be showcasing in an auction soon. But in order to start any kind of work I have been advised that I must take out an insurance policy to cover the house. It's similar to a landlord's insurance but with a higher price tag. You have to take what is called an ‘empty/vacant house insurance and the longer the house has remained vacant the higher the premium. I wondered why this is and my readings led me to believe that if a property is left vacant it automatically renders itself to higher risk of vandalism, break-ins, squatters all tend to make their mark and the investor is the one that foots the bill. Just swallow the bitter pill, ain't nothing we can do about it. The best way to get some quotes is by word of mouth so I put the question up on my property WhatsApp groups and you know what happened next? floodgate of recommendations. I spent an entire morning going through the list of brokers, some good and some not so good.
Top Ten Things To Know
address of property with details in terms of build type etc
year of build (that one really caught me out)
type of roof (yes they did ask me that)
type of policy you require (basic, extensive), I had to read further on this
time frame: 3, 6, 9 or 12 months, bear in mind if you pick a shorter duration and your work goes over the deadline then any top-up is quite expensive
know about some local searches, is it a flood risk area or in a neighborhood of outstanding natural beauty (all this affects your premium)
amount or minimum cover, my bridging company said at least £350k
do you have any structural work planned? As the greater the refurb the higher the premium generally
If you have a lender giving you the money for development then you must note their name on the policy ‘as interested party’. Failure to do this could result in no payout in an event of a claim
read the policy/summary at least 10 times (and once more for good measure bringing it to 11 hahaha...) You could never read it enough.
Just to make you aware I have carried out this task with a hypothetical house in mind. Some will say it's futile to do this, but guess what, I will rather make my mistake on a fake house than on a real purchase and I'm glad I did as so many companies declined to insure it. By doing this hack I can now tweak the language I use for next time and know exactly what I need to say or do. I also have a rough idea of the cost and can factor this into my spreadsheet for better deal analysis.
Tip: Get saving! Insurance doesn't come cheap with quotes ranging from £595-£1200. Good Luck.