High cost of insurance but policy now offering reduced cover

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    High cost of insurance but policy now offering reduced cover

    We own a small studio apartment in a part converted/part new build (3.5 years) development, which was sold by the orgiinal developer two years ago - our share of the building is 1.05%. The new landlord immediately increased the cost of insurance cover by some 55% so that we paid £176.14 last year and this cover had a £10,000 wet perils excess which had not existed before. The wet perils excess was apparently due to the high number of claims which had taken place.
    We were since told in January that the insureres were not covering wet perils (i.e. water egress) at all but were not given any reducation in our premium. We have now received a bill for £179.73, when we were expecting a reduction due to the fact that one of the main covered items in any insurance policy wet perils) were excluded. The Freeholders says that "strenuous efforts to obtain cover both via the current insurers and other companies has been attempted, we are advised that due to the claims history for the development, escape of water cannot be covered".
    Our three questions are:
    1. Are we right to think that our insurance costs should have gone down not up, as the building cover is now rather limited. £179.73 seems rather excessive for a small studio.
    2. Is the Freeholder responsible in any way for the defects in this building which has clearly not been built fit for purpose - it is only 3.5 years old. The main contractor on the building has gone into liquidation to re-emerge under another name! The problems have clearly been of long-standing but as we understand it the NHBC cover was not invoked within the 2 year time period.
    3. Our own brokers have said that they could probably get some form of wet peril cover for this property by going to specialist insurers - which may be better than having to pay for all water escape damage through the service charge.
    Are we able to ask the Freeholder to look further ito this?

    Any advice would be much appreciated, thank you.

    #2
    Without knowing the actual claims history it's difficult to comment. The premium will be affected by the claims history, even if they remove that peril from the cover. If the claims history is that bad it could be that no one else will offer cover. £179 doesn't sound like a lot if the claims history is indeed that bad.

    It's possible but unlikely that future water damage claims can be paid for through service charges.

    All I can suggest is you obtain a copy of the claims history and try elsewhere.

    Comment


      #3
      With new build (and older build where pipes are old or pipes of mixed material barrel to lead to copper to pvc) this is not uncommon.

      The liability lies with the original developer and you are within the time limits to proceed against them, if as it appears that the original developer and the main contractor are two different entities. One cannot pass blame the other, you had a contract with the developer not the builder.

      It is sensible to have a plumber and chartered building surveyor or chartered building services engineer to inspect and report on the causes, and how to fix them.

      The cost of that might be ( and often is) less than the litigation! Fixing it or confirming that all issues have been resolved after earlier leaks might then make the insurers more open to insuring, individual flat owners add it to their cover, or a specialist insure.

      As to service charges
      -flat to flat leak; this liability must be borne between the two flats involved, not service charge.
      - communal services leak- this is the freeholders responsibility to repair, however you may be limited in making contributions ( it is a very complicated subject).

      It is in your mutual interests then to seek out the original developer or take a pragmatic approach to the cause of the leaks, with technical and legal help.
      http://www.cibse.org/
      www.rics.org/
      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

      Comment


        #4
        Thank you very much for the two responses above which are very helpful.

        I suspect that the original developer, having sold on the Freehold very quickly after the building was finished, has dissolved the company, but will check. Can you still pursue directors of a company which has been dissolved?

        Regarding the high number of claims through the insurance, we have been told that many of them are by individual flat owners, for leaks within their own flats. Should they not have claimed on the main buildings insurance but through their own individual insurance - as this would have greatly reduced the number of claims? On the other hand, it appears that the insurance company has paid out for these claims.

        It does seem that the best way forward is to try and get some of the faults in the system repaired, but I understand that it will be very expensive as most of the pipework etc is hidden in walls and ceilings. On the otherhand, this might be cheaper in the long run than paying a high cost for what is rather limited insurance.

        Comment


          #5
          Normally the landlord insures the building, and the flat owners just insure their contents. Leaks from flat to flat are covered by the landlord's buildings insurance, not the flat owners contents insurance (although if a leak damages a "content" such as a TV there may be 2 claims, one on each policy).

          Comment


            #6
            Originally posted by Tulula View Post
            Normally the landlord insures the building, and the flat owners just insure their contents. Leaks from flat to flat are covered by the landlord's buildings insurance, not the flat owners contents insurance (although if a leak damages a "content" such as a TV there may be 2 claims, one on each policy).
            Tulula is right. The pipes exclusively serving the flat are almost always the responsibility of the leaseholder ( see your lease), however as part of the landlords building insurance, leaks from pipework are normally covered.

            In the absence of cover in most cases the leaked on can claim against the leaker, which can be expensive as you can see from the other costs.

            In one case back in 2000, a new instruction had a terrible record, and the common factor was leaking appliance connections. In the 80 or so newish units, at I think £25 a unit, I had them checked out (as the lease allowed entry to inspect and repair on notice) and most had poorly fitted loose or about to leak washing machine connections or dishwater attachments. As the cost of a notice and revisit was more than £25 all agreed to pay the amount and they were fixed there and then. It cost then £300 for the plumber for 2 days for the block cost, and a cost per flat of £25 odd; at £700 or so,that's cheaper than a lawyer!

            After this the insurers reinstated cover with a high excess which was brought down on renewal.

            I used the same tactic in new build recently with very poor plumbing ( and the PM was surprised that I was happy to help the plumber with the marble tops and crawl under baths as us old school types do) except here it is so bad we have to litigate!

            there is hope yet.
            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

            Comment


              #7
              Originally posted by OllieP View Post
              It does seem that the best way forward is to try and get some of the faults in the system repaired, but I understand that it will be very expensive as most of the pipework etc is hidden in walls and ceilings. On the otherhand, this might be cheaper in the long run than paying a high cost for what is rather limited insurance.
              But many pipes can be inspected via a small hole or two and a drain camera. Find a reputable non franchise company ( as they are often very expensive), or a Surveyor or Engineer, as above, and inspect one typical flat. If you discuss it with the insurers some are prepared to help advise you in such investigations as "action to mitigate losses".
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment


                #8
                I had them checked out (as the lease allowed entry to inspect and repair on notice) and most had poorly fitted loose or about to leak washing machine connections or dishwater attachments.
                I once did the same thing with ball valves on an estate of 300 + flats. Never again.

                Comment


                  #9
                  Originally posted by Tulula View Post
                  I once did the same thing with ball valves on an estate of 300 + flats. Never again.
                  I love it when they deny that they leak, yet even in the heart of a very parched summer, the grass below their overflow is green and growing!

                  Still it's more fun than flying a desk.
                  Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                  Comment


                    #10
                    Not to mention the seaweed growing on the walls.

                    Comment


                      #11
                      Originally posted by Tulula View Post
                      Not to mention the seaweed growing on the walls.
                      "Nah lov, not me overflow; that's rising seaweed."

                      That the same can be said of Lady XXX who insisted that her personally chosen ( at the quarry) Italian marble floor was not to be removed and that if any pipe was leaking underneath ( it was and was hers to repair ) that the home below must be opened up and the ceiling and concrete floor ( about 80 years old and as hard as) and they suffer the inconvenience as they are "merely new money and must be used to living in a muddle". When she is/was chairman of the RMC, it's a toughie!
                      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                      Comment

                      Latest Activity

                      Collapse

                      Working...
                      X