Buildings Insurance - tax scam?

hambone

My incredibly dodgy freeholder has insured our property (I am the sole leaseholder) for buildings insurance with a rebuild value of over £1,000,000. Yes £1 million to rebuild a 3 story Victorian house in north London.
The terms of my lease dictate that he organises the insurance, at his discretion, and I have to pay 50%.
This years insurance is a total of £2843.00, of which I have to pay half.

Whats he up to? Is it a scam? Seems we are both needlessly overpaying and the property is way overinsured.

Any ideas anyone? His broker wont even acknowledge me as he only acts on behalf of the freeholder. When I asked the freeholder he told me to go to hell!

Oscar_The_Grouch

You will probably find that the freeholder gets a "kick-back" from the broker; it's fairly standard that the broker gives the freeholder a large payment (under the table of course, because the FSA would not approve of such things) for the guarantee that they will retain the business.

Your best bet is to flog the flat and move somewhere else. You could go down the route of getting cheaper quotes, threatening your freeholder with legal action and having him refuse to fix anything in the property until you have wasted significant amounts on legal fees, but what's the point?

Alternatively, get some quotes elsewhere to see how much you can knock off the price then offer to buy the freehold for, say the equivalent of 5 years worth of premium savings. Go up as high as 8 years savings and see how you get on.

beanybop

They are trying to rip you off.

My house has a rebuild of more than £1m, plus extra .5m for outbuildings, plus loads of contents, and high jewellery cover, and away from home cover etc. etc.
My premium for all of this is what they want to charge you for your half share. In other words £1350.00 for all of mine, yet more than that for a half share and less cover etc.

Do not let them get away with this.

You may find it hard to get comparison quotes for a rebuild of £1m, as many ins cos. do not want this as it is not standard. However most will do an unlimited cover based on number of bedrooms that will come in at just a couple of hundred I would have thought.

Good luck