£4k+ Buildings Insurance For Block Of 4 Flats

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    £4k+ Buildings Insurance For Block Of 4 Flats

    I am aware that this can vary greatly from building to building depending on the specifics, but I'll give it a go anyway!

    I am a leaseholder of a flat in a building containing 4 flats spread over 5 floors - Lower Ground, Ground, and 3 Upper Floors - in a conservation area in London. It is a late Victorian terrace conversion with no lift. The footprint of each floor is approx 800 sq ft. Residential safe area, 300m away from high streets.

    I recently received an invoice from the managing agents for buildings insurance stating that the total premium was in excess of £4200 including tax, including £800 for terrorism cover, meaning each leaseholder's share would be in excess of £1000. The buildings sum insured was £2m.

    This is an increase in premium of 25% from the previous year. Does anyone have a rough idea of the range in which the premium should be? over 4k seems really excessive but getting quotes from the online tools is difficult since these are mostly for individual dwellings rather than blocks of flats.

    #2
    Is the freehold company a big landlord in central london ?

    Cost to insure depends on location, size of building and past record of insurance claims.

    Your building floor area size is 5 x 800 sq ft = 4000 sq ft. Some local surveyor should be able to tell you if £2 Mil is the correct "insured value for reinstatement" ?

    You must ask your neighbours in similar type building -- what is the insured value and where to buy.

    You must make a written request to MA for a "summary of insured cover" for the building by "registered post" and you will get the details within 30 days or failing to receive the info, it becomes a criminal offence .

    Then you use the summary of insured cover as "buying spec" to get quotations from other insurance brokers.

    Some types of policies are plain "buildings insurance cover " .

    Some policies are " block of flats insurance " and include alternative accommodation for 2-3 years. public liability and employee liability, water leakage etc..

    I believe one of the big 4 high street banks offers "house insurance up to £ 1 Mil cover" for £400 p.a .

    So being charged £4000 p.a for insured cover of £2 Mil looks OTT.

    Comment


      #3
      It is so difficult to give an estimated price without the full info as you know. However, if there are no claims/subsidence/flood or any other adverse factors, the £4k figure is definitely excessive even for a policy with all the extras included.

      As above says, you need to get the full insurance information from the agent and then obtain like for like quotes which you can then put back to the agent.
      Steve Smith - Company Director at a leading Landlord Insurance broker with 20+ years experience in the industry
      LandlordZONE Verified Poster and Topic Expert for Landlords Insurance since 2009
      See my profile for contact details

      Comment


        #4
        As a comparison, just renewing our insurance currently. Renewal price is less than £600 for a Victorian conversion, 3 flats over 3 floors, similar sizes to yours. No recent claims. In zone 2, South London, used to be an "edgy" area but is gentrified now.

        Alternative quotes are £800-£1500, so we will renew with existing company.

        We self manage, so no fees to add on top.

        Sounds like you are being potentially fleeced, but you need to get the details and verify.

        It would be easy for managing agents to arrange kickbacks for putting business to certain suppliers, that shouldn't be a surprise. I'm not saying that is what yours is doing, but it's possible.

        Comment


          #5
          Current codes say they should say what the kickbacks are.

          Comment


            #6
            I currently have the same problem with the freeholder. The premium for previous year is over 4800, and we shared between 4 flats. The building insurance was re-evaluated and the rebuild cost is a about 1.2 million. Also, the management agent ask us to pay the building insurance 9 months in advance based on an estimate of 5500 pounds for the year 2018-2019. This is way too much, so we asked the freeholder to provide the proof of building insurance. All we got is a single sheet of insurance summary from Aviva, no further details. I’m planning to post a letter to ask for a more detailed insurance certificate.

            Comment


              #7
              What information does your single sheet summary show ?

              The summary of cover should give you :

              the name and address of insurance broker and
              name of insurance company,
              name of policy holder,
              the starting day of insured cover ,
              the property address,
              the re-instatement value of the property.
              the insured value of the property,
              cover for public liability,
              cover for employee liability.
              The excess to pay before the claims policy can start .

              Comment


                #8
                Thanks for your replies.

                "
                Is the freehold company a big landlord in central london ?"


                Indeed it is!

                I contacted another broker to get a quote, it was about 25% cheaper. Not had the chance yet to contact more.

                Our single sheet summary sent by the MA (originally given to the MA by the broker) mentioned sum insured (buidlings) which I presume reflects the rebuilding cost. It did not mention anything relating to costs of alternative accommodation during rebuilding, public liability etc.

                It showed the total payable including tax - it did not segregate managing agents fees in this. I believe our lease specifies the MA are entitled to levy a certain fee, perhaps It was 12% - certainly for decorative works this has been the case.

                The terrorism cover was also very high on the other quote I obtained. This seems ridiculous. We are 350m away from any high street, the chances of the building being damaged or destroyed by terrorism are miniscule. Those writing these terrorism cover policies are almost literally printing money. I will see if it is possible for this cover to be removed.

                Addendum: Will we need another rebuilding valuation if obtaining a policy with another company? These valuations have been expensive in the past.

                Comment


                  #9
                  Originally posted by leaseholder64 View Post
                  Current codes say they should say what the kickbacks are.
                  Should.

                  How many do you think do?

                  Comment


                    #10
                    Marcolan,

                    Are you saying the summary of insured cover shows £2 Mil cover for rebuilding cost @ £3400 only and separate policy for terrorism cover for £2 Mil @ £800 premium ?

                    it just basic buildings insurance policy and not offered as block of flats insurance policy ? .

                    If you have the broker's name and address + policy number , you can send a written enquiry for disclosure of the commission taken from the premium and paid to freeholder or to the managing agent .

                    Comment


                      #11
                      And if and when you get the confirmation from the broker of any commission paid, you can then ask the freeholder why they are charging service charges AND commissions. Double bubble, nice!

                      Comment

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