Missold buildings insurance?

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    Missold buildings insurance?

    Hi all,

    I have owned a leasehold flat for the past 15 years and have since the beginning taken out buildings and contents insurance cover. I can't remember all the details but I'm sure the insurance company advised me that this was necessary.

    I have just found out that the freeholder takes out buildings insurance (paid for through our service charges) so there is no need for me to have buildings cover.

    Would I be eligible to make a claim to the insurance company for a refund of the buildings insurance premiums I have paid, on the grounds that the policy was missold to me?

    I'd be grateful for any advice.

    #2
    I doubt it.

    How was your insurer to know that your freeholder had building insurance unless you told them at the time?
    They just gave you the good advice that the building should be insured, it's up to you to decide what is actually necessary in your circumstances.

    You should check out just what the freeholders' insurance covers.
    It may only cover common parts (roof and exterior walls of a block of flats etc.), and the freeholders public liability.
    It is possible that a leasholder will require more comprehensive buildings cover for their particular property.
    And of course the leasholder will usually want their own contents insurance.

    PS. If you are double insured then it could get interesting if you were to make a claim. No doubt each insurance company would be refusing to pay out saying that the other one was responsible.

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      #3
      Miss-purchased probably. Mis-sold? Doubt it.
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        Thanks for the advice. Managing agents have advised that I definitely only need contents insurance but I will double-check with the insurance company.

        I'm sure my insurers asked a comprehensive set of questions and then advised me that I did need buildings cover. I don't remember the details but I'm fairly sure I queried it at the time.

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          #5
          I worked in insurance many years ago - if you can PROVE that there was dual insurance for the period in question you MAY be entitled to a refund -
          It happend a few times in the past (im talking years back now so things may have changed so dont just take my word for it) in such circumstances we used to pay 50percent each way -

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            #6
            Thank you alice123. I will definitely follow this up.

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              #7
              Originally posted by HazeltonLane View Post
              Thank you alice123. I will definitely follow this up.
              yes no harm in trying you never know

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                #8
                Just to update on this—It turns out I am entitled to a full refund from my own insurer IF I can provide the evidence of dual insurance. Obtaining this is proving rather tricky however, as we have had several freeholders during that time. I shall persevere, however!
                Thanks again for your advice.

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                  #9
                  You would think the insurance company would ask if the freeholder had insurance. What were they actually insuring, the whole building? How did they calculate the rebuild cost? There could certainly be a case for mis-sold imo.

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                    #10
                    Your annual statement for service charge account will show the the annual building insurance is paid from the service charge account.

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                      #11
                      Originally posted by Gordon999 View Post
                      Your annual statement for service charge account will show the the annual building insurance is paid from the service charge account.
                      Annual statements are not summary accounts. They typically just show the total share of the service charge attributable to the property.

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                        #12
                        Update… I received a full refund of the premiums I paid for buildings insurance!

                        However, I am now wondering if the insurers should have also paid interest on top of the refund? Apparently this is called statutory insurance. I queried it with them but apparently they had never heard of it(?!?).

                        According to this site they should pay 8% simple interest, so in my case it would be a significant amount.

                        What could you get back?
                        If your complaint is accepted by the financial firm or upheld by the Financial Ombudsman you should get the following refunded:
                        • The cost of all your insurance premiums, for the duration you have held the policy
                        • Any interest you were charged on the cost of your policy
                        • An additional 8% interest based upon the total amount you should be paid for the above

                          https://www.money.co.uk/guides/how-t...-insurance.htm

                        Comment


                          #13
                          Originally posted by HazeltonLane View Post
                          I am now wondering if the insurers should have also paid interest on top of the refund?
                          Please take the full refund and run. This was not the insurer/broker's fault. You contacted them requesting insurance and they gave it to you.

                          Despite entering into a contract with them, they have agreed to void the contract, cancel the insurance and give you all your money back. Try this with other companies (eg. mobile phone contracts).

                          We get this now and then and despite the administration costs to set up a policy, then the administration costs to cancel the policy, we cut our losses and just give the customer their money back as we think this is good practice. If a customer then turned around and asked for interest on top of their FULL refund, not sure how I'd respond!
                          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


                            #14
                            ashburnham This is a large corporation so I very much doubt they would have refunded me unless they were obligated to do so!

                            Insurers have a duty of care to ensure the cover they sell is suitable for the client's circumstances… according to the site linked above. So no, you are not doing your customers a favour.

                            Comment


                              #15
                              HazeltonLane,

                              Make the request that you want a full investigation into the matter with the insurance company, follow their official CHP and if necessary take to Financial Ombudsman to review.

                              They would have asked you several questions about the building cover so if you said it was a flat then they should have known you only needed contents cover...write to them and see what they say.

                              Comment

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