The title of this post comes from the book about developing 42Below vodka into a global brand. The premise of the book is that you always run up against people who love to say “No” to the dreams of others. This I found to be true when trying to obtain and maintain insurance on my building. The photo is of the kirk under renovation as I was trying to get insurance cover at the end of February 2020.
The general advice about insuring a new property is to use the same company that insured the risk for the previous owner. I use a mainstream insurance broker for my business insurance, so I approached them to find me building insurance when I bought the property, and provided them with the name of the current insurer.
They were happy to provide commercial building cover, but I had to have a security and smoke alarm installed, monitored 24/7, and have a physical inspection of the property inside and out every week. This was despite the fact that the building was not legally habitable, wasn’t connected to water or sewerage, and had a policeman living on one side of the church………
Eye-watering six-month fee paid, I had to extend the insurance a couple of times due to the delay in getting drawings done, construction finance, and a builder engaged. Then came the fun and games when I was trying to get a certificate of insurance for the build contract. This is the certificate you’re required to have by law for construction contracts that exceed $30k.
My ‘material damage’ policy covered construction works of up to $100k. I was advised at my first extension that I’d need to provide the insurer with the details of my suppliers who would be carrying out the restricted building works. When the time came to do so, a new broker tried to get me to take out a construct works policy which would be an additional fee to my existing policy.
After much to-ing and fro-ing, contacting her manager etc etc they agreed that I didn’t need a contract works policy, and there was no further information I needed to provide them. There was a bit more faffing about to get the certificate of insurance, but eventually they provided it to me in early December 2019.
One of the things I discovered in this process was that the insurer had decided not to extend my insurance beyond 28 February 2020. I now had a hard deadline to get the building habitable.
Novice that I am, I thought that I’d be able to get domestic building insurance once the building was legally habitable, which was due in mid-February. I put the wheels in motion to get domestic insurance, only to discover that I needed to have a Code Compliance Certificate in my hot little hands before the insurer would take on the risk.
So back to my broker to see if the current insurer would extend the policy for a few more months. No – but you can have a contract works policy instead. Does that cover me for events unrelated to the construction works? No. But my mortgage holder requires me to have building insurance! Sorry, the answer’s still no.
So back to the other insurer to see if they can do something for me. After much faffing about the answer came back – sorry, no. Cue online research to find insurance. No sorry, we don’t insure buildings that old. No sorry, we don’t cover that sort of risk. I also looked into cover for natural disasters provided by EQCover Direct. Unfortunately it would only give me $150k of cover, but it was better than nothing.
Then came the phone-bashing to follow up on the online form submission. (Don’t get me started on the digital channels insurance companies use, or not.)
Then came the questions. How old was the building? Was it listed with the council or Heritage NZ? Did it have any scrim or sarking? Had it been fully re-wired since 1946? Was it sitting on concrete piles? Fortunately I had the answers to all these questions through the research I’d done into it’s history in 2018.
How about contract works insurance instead? What work had I done so far? What work was yet to be completed? When would it be completed? How much had I spent so far? How much more did I have to spend? What was going to be the total cost all up? (How long is a piece of string?) Not to mention the request for photos of the building interior and exterior in it’s current state!
Of the 12 insurers and brokers I approached, nine pretty much said ‘no’ straight away. Two brokers stood out as being very helpful, so a big shout out to Greenstone Insurance brokers and South Pacific Insurance brokers. EQC were awesome about getting natural disaster cover for me in the absence of cover from a private insurer. After much arm-twisting, my current insurer agreed to provide material damage insurance for two months – with a 50% loading on the premium of course!
Next time: Cleanliness is indeed next to godliness – redux
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