80% of community buildings make this costly mistake

Show notes (summary)

When it works, insurance helps communities build back their village, community and church halls if something bad happens. However, as our guest Will Molland reveals, there is a big problem affecting 4 out of every 5 community buildings which can mean your insurance won’t payout anything like the amount to cover a claim. Find out more, including how to fix this problem, by listening in today.

Transcript: Season 1 / Episode 16

Johnny Thomson 00:00
Hello and welcome to The Village Halls Podcast sponsored by Allied Westminster, the UK’s is largest specialist provider of village hall insurance and the home of VillageGuard. Now, insurance for village hall buildings is basically all about reassuring the local community that if something disastrous should happen, money will be there to put things back to how they were before. However, there is a significant and common issue with buildings insurance that can lead to the amount that’s paid out for a claim fall way way short of what you might expect. Today, I’m joined by Will Molland, from RebuildCostASSESSMENT.com. Will is a member of the Chartered Institute of Building and an Associate Member of the Royal Institution of Chartered Surveyors, and is going to help us understand why, well potentially catastrophic mistakes are sometimes made with insurance cover, and what can be done about it. Hi, Will, how are you today?

Will Molland 00:56
Hi, Johnny. I’m good. Thanks yourself.

Johnny Thomson 00:58
Yeah, I’m great. Thanks. Thanks Will. Now highly qualified in construction management and quantity surveying, I think it’s probably fair to say you’re a big fan of all kinds of buildings Will, yeah?

Will Molland 01:10
I am indeed Johnny. Yes.

Johnny Thomson 01:12
And this hopefully includes village church and community halls, right?

Will Molland 01:16
It does indeed Johnny. Yeah, I mean, I’ve been working in the built environment sector for oh 15 to 20 years now. Mainly in project management, some construction management, residential, commercial buildings. But I kind of found myself working more with heritage buildings. So getting involved in a lot of traditional materials, listed buildings, buildings in conservation areas, etc. And that naturally led into, you know, community buildings, village halls, those kind of properties.

Johnny Thomson 01:44
Yeah. And are there any halls in particular that kind of stand out for you that you’ve that you’ve?

Will Molland 01:50
Yeah, there’s quite a few. There’s quite a few I’ve worked on. Yeah, I’ve worked on ones that have been war memorials as well. So, there were quite a few halls built all over the country actually, not just in Dorset, post First World War and incorporated into them are war memorials. So that’s interesting buildings to work on. You know, there’s a lot of meaning and a lot of history behind those.

Johnny Thomson 02:12

Will Molland 02:13
Again, a lot of traditional buildings in Dorset, love that vernacular style of building with flint and brick. Some of that work that was carried out in the 19th century is really quite, quite detailed, quite intricate and you’ve just got to admire the craftsmen that built them in the first place really, particularly on you know, a community a building that they were building for their village, for their community, and the effort and the work that went into it. And then, of course, more recent builds. So there were some lottery grants handed out around about the millennium, some very smart new build village halls in and around Dorset. And they of course, contrast with some of the less smart ones, which would be converted Nissen huts. I think I’ve come across one before that was actually had been a chicken shed. But it made a rather nice hall, but that’s how it started life. So yeah, all types of community buildings out there.

Johnny Thomson 03:08
Fantastic. Yeah, they’re very diverse the halls that are used for those for those purposes. And look, I know you’re not directly involved in the running of a village hall yourself, but you’ve always been an active participant in community activities. So I guess, you know, just how important halls are particularly in rural areas like Dorset, where you’re based.

Will Molland 03:28
Yeah, absolutely Johnny. So I was trustee in a village, trustee of a village green for many years. That involved some work with the hall, we used to work together with the trustees of the village hall. I’ve been a Parish Councillor as well, in my local parish, and that involved looking after various community assets, including bus stops, bus shelters, playgrounds, etc. And yeah, you know, an important part of rural life really taking on the sort of management of that being a trustee being a guardian of that. And of course, when you go through the minutes of the meetings and you find these enormous ledgers, you realise that people have been doing this for many decades, if not hundreds of years. And now is your time.

Johnny Thomson 04:09
Yeah, too right, too right. And so anyway, there’s this big issue within insurance. That’s known as under insurance, right. And it’s worth highlighting, because it’s a very real, and extremely common threat to community buildings. So tell me a bit about underinsurance Will, and how big a problem it really is.

Will Molland 04:29
So underinsurance Johnny. So that’s a situation where, if a claim is made by a policyholder, now be that an individual or a corporate body or a group of Trustees, for example for a community building. If the sum insured that they’ve said, so that’s the amount that they believe that they’ve estimated that building will cost to rebuild is too low, and this is this is likely to be assessed by a loss adjuster and if a loss adjuster finds that to be too low then they’re entering a situation called under insurance where their claim payment is going to be reduced in proportion to the amount they’re actually underinsured. And this is a very real problem and it exists out there, you know, all the time.

Johnny Thomson 05:13
OK, so what kind of proportion of buildings, do you..?

Will Molland 05:17
So, around about 80% of all buildings are underinsured.

Johnny Thomson 05:22

Will Molland 05:22
And on average, they’re only insured for 65% of what they should be. So you’ve got a 35% gap of underinsurance. That means that if you were to make a claim, on any kind of reinstatement work on that property, you’re looking at a 35% reduction in that claim. So you know, £100,000 claim gets reduced to £65,000, you’ve got to find that £35,000 yourself, the insurer will not pay it

Johnny Thomson 05:49
Or a building, that’s a million pounds to rebuild entirely, you going to have to find £350,000, so we’re talking big, big numbers here. So basically, what you’re saying is it’s, it’s down to the village hall owners and trustees themselves to get the amount that the building would cost to rebuild spot on, when they’re insuring their building, or there could be major problems if there’s a claim.

Will Molland 06:11
Yeah, absolutely right, it is indeed. So having been a trustee, I know what that entails and I know that you’re a volunteer, and you’re usually a group of people from many different backgrounds. You’re all bringing your own expertise, you know, to that group, in order to do your best to look after that community asset. But you may or may not be qualified building surveyors. However, you can always find a firm that will do that for you. And really, it’s getting getting that building sum insured, correct from day one. That means that the policy is set up correctly, you’re paying the correct amount of premium. The insurer knows where you stand, everyone knows where they stand, and you’ve got the security, the knowledge of knowing that if anything did happen, you’re going to get a payment out in full. And as a trustee, you’ve got a legal responsibility to make sure that happens. Yes, something bad could happen to that hall, it gets rebuilt, the community then get their hall back. And all those activities that are going on in that hall day in day out in all the different groups that are meeting the mums and toddler groups or book groups. You know, the whist drives, I seem to remember is something that used to go on years ago, I’m not sure they have them anymore. But the harvest festivals, you know the WI meetings, etc. They can all carry on in that building, as they have done for many, many years.

Johnny Thomson 07:29
Yeah, exactly. And the problem is very real isn’t it? I can recall a pub burning down in a small village, I think it was in your neck of the woods a few years back. And the owner literally had to crowdfund hundreds of thousands of pounds when the insurance company wouldn’t pay the full cost. It was all over social media at the time, I think there was a few celebrities even got themselves involved in that. But that one turned out well in the end, after a massive effort. But I think most don’t have such a happy ending in truth. So the key is to make sure you insure your building for the right amount, but as you have said, trustees and so on, wouldn’t you have to be a building’s expert to do that?

Will Molland 08:10
You would really yes. And also, would you not want to go out to an independent third party surveying firm who could carry that out for you? Completely independent of the insurance industry, the building’s owners, the trustees, etc. Carry out a completely, you know, third party, objective assessment.

Johnny Thomson 08:28
So look, you’re a professional surveyor yourself. Getting a building examined isn’t cheap is it? I mean, a large hall, you must be talking what £1,000 for someone like yourself to go out there and carry out a survey?,

Will Molland 08:39
Yeah, we do have a way around that though Johnny. So we offer remote assessments. So a desktop rebuild cost assessment, we’re carrying out thousands of these a month. We can carry these out on all types of buildings, you know, houses, commercial property, community buildings and halls as well. And this is where we gather information remotely. So we use a wide range of online sources. We use ordinance serving mapping data, we go into planning databases, gathering that information, working out the area of the building, finding out what it’s made of you know what it contains, and particularly with halls actually, you know there’s usually a website attached to that for bookings purposes, we can see how the building’s put together, we can see what the interior looks like. And we can basically carry out that survey remotely.

Johnny Thomson 09:25
Fantastic. Having said that, I imagine there’s a few sceptical people out there thinking, what, you can you can assess the rebuild value of a property without even going anywhere near the building? How reliable is that Will?

Will Molland 09:38
So when we compare our desktops with our site surveys, it’s roughly plus or minus 5% on the area measurements. In terms of the rebuild rates that we might apply, again you know, we’re talking plus or minus 5, 6, 7 percent, that sort of area in terms of variants. I mean, really, what we’re looking at here is a situation where you know, in this modern world there is a lot of remote information and online data that you can gather out there. And, you know, by having teams of assessors, teams of surveyors working together gathering this information, we can put together a report that for all intents and purposes is as accurate as a site survey.

Johnny Thomson 10:18
And presumably with that then comes a better price?

Will Molland 10:20
Absolutely. Yeah. Much, much reduced.

Johnny Thomson 10:22
Yeah. So what kind of ballpark, what are we what are we talking about?

Will Molland 10:25
Well, if you were to come to us directly, £160 pounds including VAT. For that you’re getting a full, you know, remote assessment carried out by a qualified surveyor, signed off in the office here and sent back to you.

Johnny Thomson 10:39
Yeah. Better than a £1,000.

Will Molland 10:41
Absolutely. Yeah. Vast saving.

Johnny Thomson 10:44
Fantastic. And I understand RebuildCostASSESSMENT.com works in partnership with our podcast sponsors Allied Westminster and they’ve told me that with any community hall that’s insured with them, they’ll actually pay the cost of a desktop assessment. So in essence, that’s a free professional rebuild cost assessment for anyone that’s insured through Allied Westminster. So you certainly can’t grumble about that, I suppose?

Will Molland 11:09
No, you can’t. No. I mean, that’s an excellent service. And as a trustee of community assets in the past, I would have quite liked to take advantage of that. Many years ago, wasn’t available, though.

Johnny Thomson 11:21
And if you want to find out more about that, I think the easiest way would be to visit VillageGuard.com and look for the section that’s ‘free valuation report’. Brilliant. Well, unless there’s anything else Will, that you you know, you’d like to add to that, I would just like to say thanks for coming on.

Will Molland 11:42
That’s okay, Johnny, no it’s been really good to catch up.

Johnny Thomson 11:44
Yeah, it’s been great finding out about underinsurance. As I say I think it’s not something that everybody knows about and I think people are often surprised by how common a problem this is. And most only, unfortunately, discover that they have a problem when it’s when it’s too late. So yeah, the key takeaway here, I guess, is make sure you get an assessment before a problem arises rather than when a claim does.

Will Molland 12:08
Absolutely, I totally agree, Johnny. I think, you know, we deal with insurance brokers, policyholders day in and day out, and I’ve yet to meet a policyholder, or anyone really in the insurance business who, when coming at it from the claims side, you know, where there’s been a loss, and there’s a claim in and under insurance has been found, you know, any kind of assessment via desktop or site is, yeah, it would have been an easy kind of message to get through. Yeah, I mean, from my point of view, really, you know, get a desktop rebuild cost assessment carried out. If you haven’t had that building looked at for a while, as a first, as a first step, get that done. If your property is listed, I would really suggest you do get that done with some urgency, if you haven’t had a survey done on it for a while. Listed properties are a key area for underinsurance. And you can never really underestimate the additional costs involved there. So well worth looking at.

Johnny Thomson 13:02
Yeah, it’s not just about being insured. It’s about being insured properly.

Will Molland 13:05

Johnny Thomson 13:06
Yeah. Well, thanks again Will, and that’s all folks for this episode. Get your entries in for our Wonderful Villages Photo Competition as you could win £1,000 for your village hall and £500 for yourself. You can find out more on a special page on our website. Many thanks to our headline sponsor and specialist insurance provider Allied Westminster for supporting our podcast, and whose services, as I’ve mentioned, you can discover more about VillageGuard.com. And to online booking system provider Hallmaster who also help make our podcast possible and can be found at Hallmaster.co.uk. You’ve been listening to TheVillageHallsPodcast a unique listening community for Britain’s village, church and community halls and anyone interested in the vital community services they provide. We’ll be back again in two weeks time with another episode. So if you haven’t already, please visit thevillagehallspodcast.com to subscribe, sign up for updates, link through to our social media pages and find out more. Until the next time. Goodbye for now.