Why are thatched home insurance premiums rising?

Owning a thatched home brings with it some unique challenges – one of which is insurance. The thatch home insurance market is tough for consumers. Homeowners are finding their premiums are increasing and some are finding it difficult even to find insurance in the first place. Here are some contributing factors:

Inflation: Inflationary pressure is increasing the cost of contents and particularly buildings. As insurers index-link sums insured in order to keep up with these higher costs, there will be a corresponding proportional rise in premiums. Whilst it may seem that insurers are profiting from this, they are not – their claims costs are also increasing.

Claims: Claims costs are increasing due to the delays caused by Covid, Brexit and the shortage of both labour and materials. So a three-month repair may now take six months, causing a knock-on increase in claims administration and, more importantly, alternative accommodation costs.  Plus, insurers are continuing to be hit by major flood and storm events, shortly after recovering from storms Ciara and Dennis in 2020.

Has this just affected thatched property insurance?

No. The home insurance market is seeing increases too. However, the increases are not as high and the underwriting criteria is more stringent for thatched homes.  

Why has it affected the thatched property market more?

Simply put, it is supply and demand. Insurers, such as Home & Legacy, have left the market completely and Midas has recently left the thatched market. Their customers are not being offered a renewal and new clients aren’t being offered a quote.  This means fewer insurers and less capacity to absorb the demand for thatched property insurance.

Why are they leaving the market?

In short, thatched insurance premiums were too low versus the claims costs the insurers were experiencing. It’s not just fire. Recently a small number of thatch properties have experienced high value flood claims due to Storm Henk.

Why are thatched property claims so high?

Thatched properties tend to be listed, which must be factored into the rebuild value of the home. For example, in the event of a claim, consideration must be given to the increased length of time taken at the planning stage to ensure the repair/rebuild meets with planning authority requirements.  There are also listed building consent requirements. These can have a significant impact on the overall cost to rebuild the home. The cost of new systems, such as wiring and plumbing plus the timber framing, could also be significant. It’s not just the thatched roof that is usually ‘non-standard’ on a thatched home. Thatched properties are often timber framed with brick, stone or plaster infill. All this impacts the overall rebuild cost, which in turn results in higher insurance premiums.

Is the thatched property market likely to change?

The market has always cycled up and down over the years. For as long as many insurance brokers can remember, it has been a “soft”, buyers’ market. It’s now shifted to what is known as a “hard market”.  However, as premiums rise other insurers may enter the market with the competition putting less pressure on premiums and the market will eventually soften.

There are still ways to manage your home insurance premium which you can find by reading our article: Ways to manage your Thatch Home Insurance premium.

How can Howden help?

A hard market doesn’t mean a hard no. Our experience in dealing with these types of properties means that we understand the distinct needs, maintenance issues and concerns that an insurer will have. We work with multiple thatch insurers and have our own specialist thatch policy underwritten by Aviva.

You can buy a thatched insurance policy directly, but in the event of a claim, you need to be sure you fully comply with the many terms that can apply. Thatched home insurance policies contain more policy conditions than standard home policies. If you don’t comply with these, you may find yourself facing difficulties in the event of a claim or obtaining cover in the first place. We’ll help you with this and we always check the policy wording and will offer you guidance on any limits and exclusions.

To speak to us about insuring your thatched property, call 020 7543 2801, email thatched.homes@howdeninsurance.co.uk or request a call back.