Property Insurance Common Mistakes – and our Top Tips to avoid them

Posted February 9, 2026

As a property owner you may think that biggest and most common insurance problems are caused by fires, floods or burst pipes. In reality, this is not necessarily true and they may actually be caused by avoidable mistakes made way before a claim ever happens.

Here are the most common mistakes we see, and our top tips on how to avoid them, from a specialist UK property insurance broker:

1) Insuring the building for the wrong figure

Too many property owners use either a market value, a back-of-a-fag-packet estimate, or last year’s number which is dangerous and often incorrect. Buildings insurance is about reinstatement which means the cost to rebuild, often on a “day-one” basis, which is a different calculation entirely. RICS are clear that a reinstatement cost assessment is about rebuilding after an insured event and that the figure needs to be “correct and reasonable” which means including costs such as debris removal and architects fees.

Cape Top Tip: For anything non-standard such as listed buildings, unusual construction, complex sites etc, we recommend considering a proper RICS reinstatement cost assessment and keep it reviewed every 3 years as they recommend.

2) Accidentally breaching the duty of disclosure

Commercial property insurance is governed by the duty of “fair presentation”. If material circumstances are not disclosed clearly, it can impact the insurer’s response at claim stage, sometimes even leading to not just avoiding a claim, but the policy in its entirety depending on the severity of the breach.

Cape Top Tip: Don’t assume it’s obvious even if you are renewing with the same insurer. Material facts such as directors previous history, flooding, vacant areas, non-standard roofing, cladding, security issues should always be disclosed at new business and renewal stage. Best practice is to discuss and document it with your broker, allowing us to present it properly to an underwriter each year.

3) Not understanding what the policy is actually covering

Property owners often think commercial property insurance is one thing. In reality, cover is typically split between several different sections that can include; buildings, contents, and additional sections such as Terrorism. On top of this the level of cover can vary depending on the type of building, for example restricted FLEA (fire, lightening, explosion/earthquake, and aircraft) may only be available for unoccupied or partially occupied properties.

Cape Top Tip: Work with a broker such as us who will walk you through the sections and exclusions in plain English to ensure you understand what your policy actually covers and if it meets yours and/or your lenders requirements. We can then align them to your building’s real-world risk profile to ensure an adequate policy is purchased.

4) Leaving unoccupied or partially occupied buildings on current terms without providing an update

Unoccupancy is one of the quickest ways to trigger restrictions in cover and issues with claims if it is not managed correctly. Even the British Insurance Brokers Association (BIBA) highlights unoccupied property as a distinct insurance need as it is not business-as-usual cover as we have noted above.

Cape Top Tip: Tell your broker the moment occupancy changes, even temporarily which could include void periods, refurb, tenant changeovers, and intent to sell/refurbish.

5) Treating Escape of Water as a small potential risk

Water damage can be persistent, expensive, and operationally disruptive. UK insurers and brokers have put significant emphasis on prevention because claim volumes have been high in recent years. Therefore, risk management, awareness and cooperation needs to be high on any property owners agenda.

Cape Top Tip: Insurers love evidence of risk management; leak detection systems, stopcock access, trace-and-access clarity, and winterisation plans are all going to assist in underwriting your risk and affect the excesses charge for this peril.

Overall, it is no surprise that collaborating with the correct broker who knows what they are doing and how to navigate these challenges, along with early engagement to gather information, is key.

Cape Insurance are a specialist property & construction broker who have extensive experience in placing a plethora of varying property risks. Speak to our team about a property your own, are purchasing, are responsible for or are perhaps building to see how our team can assist you in securing the correct amount of cover for your needs.