Owning an stately home is not just a matter of straightforward ownership, but a responsibility almost to the country as a whole to ensure that it is in good hands and can be passed onto the next generation, or new owners, in a good state of repair.
Therefore, it is not just a matter of ownership, but almost one of stewardship, adopting a philosophy that understands that this country’s stock of historic homes is not limitless and that each time we lose a remarkable property, it is gone for good.
And the very nature of stately homes means that they are more vulnerable to damage by the natural elements, as well as modern-day accidental damage.
Think about what has happened recently to Hampton Court and Windsor Castle, ravaged by fire and having taken years and millions of pounds to restore, and it gives some idea as to the issues that owners face with stately homes. But even though restoration work is possible, it is considered to be the very last resort and prevention is always better than cure.
Stately homes need a higher level of care and attention than other properties and nowhere is this more important than when it comes to Stately Home Insurance.
And one of the most important things for owners to realise, is that they must be as accurate as possible when putting together their insurance papers and forms. It is of little use arguing after the event with an insurer who does not believe their client was ‘honest’ when compiling the policy.
But firstly, the owner of stately homes have to make some decisions about their property before they decide what kind of insurance they need.
Firstly, as a starting point, does the stately home in question have a true, historic value? In other words, will its historic heritage be destroyed if it was not to be rebuilt exactly as it was before? If not, then a full reinstatement insurance, see below, might not be necessary.
Secondly, many stately homes do not stand alone, so some consideration will be needed as to their surroundings. In simple terms, if the surrounding buildings rely, aesthetically, on the building damaged, then there is no choice but to repair it to the highest standard.
Thirdly, is the stately home part of a commercial venture, or does a business rely on its being available to fulfill that role? It may be within a formal lease agreement, have a dependent mortgage, or be a part of extensive commercial interests. If so, then comprehensive cover will required.
Fourthly, some thought has to be given to the size of the insurance premium needed to offer a stately home complete cover. If the premium can be proved to outweigh a building’s commercial, or historic value, then it’s justification can be questioned.
Finally, an owner of a stately home has to appreciate that total loss is not common. Most building insurance policies are settled on a partial loss basis, and not on the basis of a full settlement. So arguably, premiums need to reflect this reality. In practice, figures suggest that most claims are for between 50 and 60 per cent of the value of the full potential value.
Once the basic questions have been answered, it’s time to think about the level of insurance needed.
First comes total reinstatement, which was referred to above. As it sounds, this level of insurance covers the owner to rebuild to the same quality and design of the original, bearing in mind current building legislation and regulations. If appropriate, it also covers partial loss, should only part of the stately home have been destroyed.
Of course, this level of cover does not come cheap and owners have to weigh-up the costs of the premiums, against the risk of the stately home being destroyed. It is often not an easy decision. Less expensive cover is available, but the risk of not being able to afford the necessary repairs is great.
The next level of insurance to consider for stately homes is modern materials clause. This will cover reconstruction of a damaged building, but not to the same standard as before. This will cover the cost of materials which are more modern and therefore more easily available. This will have obvious problems in conservation areas, as one building within many built to a more modern standard, will be unacceptable to many.
Next is first loss and agreed value insurance. This identifies the largest risk of say one building within a number of buildings, or one part of a large building, and provides cover for that. This is useful when say total reinstatement assurance is too expensive. This is useful technique if something within the building is particularly valuable and needs complete protection, but the whole building does not require maximum coverage.
Up next is indemnity insurance. This provides cover to build a modern replacement, should the original stately home be lost completely. Although, owners with indemnity cover only will get a shock if their property needs to be replaced on a like-for-like basis.
Sun, Mar 1, 2009
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