Commercial insurance on Residential Flats

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  • Dazvader
    started a topic Commercial insurance on Residential Flats

    Commercial insurance on Residential Flats

    in a nutshell our management company formed several years ago and the freeholder appointed a friend of his family. As I understand it one of the blocks in our building was set up as the management company address. After a couple of years or so our insurance premium doubled per flat. We were advised that this was because the previous policy was inadequate and didn’t cover the rebuild of the entire building.

    Recently we have been told we have to have an EICR certificate and have been given less than 2 weeks to get one. I have researched this and can not find any legal requirements for residential dwellings to have one. My electrics are all modern as is my fuse box.

    When challenging this I was brushed aside and told that one of the blocks (the management company one) is down as a business for renting out property so we have a commercial insurance. So it looks like that to accommodate one block the other 4 blocks are having to pay the additional premiums and are required to have these certificates as part of the insurance conditions for commercial insurance.

    No one has seen a copy of the policy.

    Can anyone provide any advice.

    Thanks

  • Dazvader
    replied
    Originally posted by Stacker View Post
    So ask to make an appointment at the office who is holding the information and go and inspect it.
    Do they have to provide that facility in my home town?

    Leave a comment:


  • Dazvader
    replied
    Gordon999,

    What I’ve been sent does not include the annual premium and the broker won’t speak to me so I can’t ask about the premium paid nor if any commission was paid. There are 27 flats across 5 blocks in one large Victorian building. It says we are insured for £8,500,000.00 which based on what you said seems unnecessarily high. There’s also another figure in brackets of £6,500,000 for buildings excluding landlords fixtures and fittings and tenants improvements. Not sure what that means either.

    So can the broker refuse to give me information about premium charged or if commission was paid? How do I find this info out then? How can I establish if we are overinsured? Is there anything else I should be checking?

    Leave a comment:


  • leaseholder64
    replied
    The OP says there is a "flat owner's certificate", which if it came from insurer suggests it is intended for blocks of flats.

    Leave a comment:


  • Gordon999
    replied
    The insurance policy may be very basic insurance policy one for a "commercial building" and not specifically a policy for a block of leasehold flats policy.

    Usually only the policy holder can make a claim under the insurance policy. You should check the wording in your own lease to see if wording requires the buildings insurance policy to include names of the leaseholders, giving right to make a claim under the policy.

    What is the total insured value for re-instatement of entire building ? . How many flats and average size ( square feet ) ?

    For average size flat around 600 sq ft flat , I would expect the insured cover to be roughly around £100K/flat . So if you multiply by the no of flats in your building , it should be approx. the insured value for the building.

    The summary of insured cover ( for the building) from the managing agent should include the starting date of the policy, the policy number , the annual premium for the policy. If you multiply by the % you pay under service charge, you can calculated the insurance charged for your flat. .

    Leave a comment:


  • leaseholder64
    replied
    The problem doesn't have to be in the freeholder's NON-demised parts. It could be a fire in an individual flat. The important thing is that is not the result of an action by the tenant. In fact you may well find that that there are get out clauses for the insurer if the tenant is the cause of an otherwise insurable event.

    Leave a comment:


  • AndrewDod
    replied
    There are really two different types of potential loss of rent cover. If they are talking about a) alternative accommodation for both ordinary lessees and tenants of lessees in the case of a problem in the freeholder's demise that causes the building to become uninhabitable then fine b) If it is effectively landlords insurance being purchased then that is an inappropriate insurance policy (and if such a claim led to an increase in premium or was made at all that would really be a type of fraud).

    Leave a comment:


  • Dazvader
    replied
    Gordon999,

    How would I know if what they have sent me is all the relevant information? Does a 1 page ‘complete flat owner certificate’ and a ‘complete property owner policy wording’ brochure containing introduction, how to make a claim, complaints procedure, insuring clause, policy definition, policy conditions, policy exclusions etc etc sound about right?

    the freeholders are insured for things like loss of rent. Would that benefit me if I rented out or only the policy holder? Should we have that kind of cover?

    Leave a comment:


  • Dazvader
    replied
    Originally posted by Gordon999 View Post
    Yes, you can ask both the broker and the insurance company to declare what commission is paid under your building insurance policy.

    If they are not willing to disclose , then suggest you may report to FCA which is the regulator and supervisor for financial products in UK. customers


    .
    They won’t answer any questions as I’m not named on the policy. Data Protection.

    Leave a comment:


  • leaseholder64
    replied
    I don't think the insurer cares who pays the excess. Typically it would be the person who would have to pay if there had been no insurance.

    It is generally impossible to comply with the Regulatory Reform (Fire Safety) Order without having an EICR, as the risk assessment will normally require you to get one.

    Leave a comment:


  • Dazvader
    replied
    Thanks for that input. Is your policy classed as a block policy or commercial. Do you have things like loss of rent, terrorism cover etc. What about policy excess for any claims and who’s liable to pay the excess in the event of any claims? Thanks for your help.

    Leave a comment:


  • TimA
    replied
    I've had a quick skim read of this topic. A fellow Owner and I decided to arrange the insurance for our block as we felt we weren't getting value for money through our Managing Agent. For several years now, I have arranged the insurance through a Broker and been furnished with the Policy Conditions, etc, from the Insurer (via the Broker). In turn, I forward it to the Managing Agent for reference. We are not obliged to produce an EICR certificate but we are obliged to obtain an annual electrical inspection of the communal lighting, i.e. the emergency lighting that it remains on for 3 hours without an electrical power. However, depending on the age of your property, I suspect an Insurer may ask for it as the communal wiring may be aged or your main Landlord fuse board may not be compliant with the current regs, e.g. each fuse is clearly labelled. Hope this helps.

    Leave a comment:


  • Stacker
    replied
    So ask to make an appointment at the office who is holding the information and go and inspect it.

    Leave a comment:


  • Dazvader
    replied
    Yes a leaseholder. I have done that and have a copy of an insurance certificate and a policy document that seems like it’s just a generic policy wording doc that every policy holder would get for this type of policy. It’s called ‘complete property owner’. Policy wording.The certificate doesn’t have much detail on it.

    Leave a comment:


  • Stacker
    replied
    Are you a leaseholder? You have the right to see the insurance policy and documents, make the request on the freeholder or managing agent. They have to comply

    Leave a comment:

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