Buildings Insurance through Factor

muggedoff

Can anyone help me - I am being advised by factor that new legislation is coming in that means buildings insurance needs to cover 150% of rebuild cost. My flat rebuild cost through ABI is £81K yet I am insured through factor for £127k and am paying associated premium. I would like to reduce premium by resetting rebuild cost to £81k - what are implications (factor is telling me that if I do this then any claims might not pay out as I don't have enough coverage!)

huckster

You won't be able to reduce the sum insured. You have legally agreed to Insure via the factor and to comply with the terms of the arrangement.

Take this up with the people responsible for the factor arrangements and ask for written evidence as to why the sum insured needs to be at £127k. Also ask them how much extra it costs for the extra cover. I suspect that it may not make much difference.

rs65

muggedoff wrote: »

Can anyone help me - I am being advised by factor that new legislation is coming in that means buildings insurance needs to cover 150% of rebuild cost.

Ask them what the act is they refer to.

I wonder if the policy is on a 'day one reinstatement basis'. Not common on a domestic home policy but this sounds more like a commercial policy. It would have a built in allowance for inflation, although 50% sounds high.

huckster

rs65 wrote: »

Ask them what the act is they refer to.

I wonder if the policy is on a 'day one reinstatement basis'. Not common on a domestic home policy but this sounds more like a commercial policy. It would have a built in allowance for inflation, although 50% sounds high.

This is to do with Scotish law. Don't quote me on this, but I believe that £81k refers purely to the individual flat and the extra sum insured is for the overal building e.g communal areas, roof, that all flat owners also have legal responsibility for. Elsewhere in the UK, it would just be a block of flats policy for say £2m to cover the whole block.

If this is correct, what the OP if basically asking for is an opt out, so they don't have to pay their contribution towards the overal Insurance of the block of flats where they live.

rs65

huckster wrote: »

This is to do with Scotish law. Don't quote me on this, but I believe that £81k refers purely to the individual flat and the extra sum insured is for the overal building e.g communal areas, roof, that all flat owners also have legal responsibility for. Elsewhere in the UK, it would just be a block of flats policy for say £2m to cover the whole block.

Oops, just quoted you.

I don't follow you - in Scotland you can have a block of flats policy for the whole block.

huckster

rs65 wrote: »

Oops, just quoted you.

I don't follow you - in Scotland you can have a block of flats policy for the whole block.

In Scotland, I believe that they have to by law, state what sum Insured is in respect of the flat only and what the sum insured is which includes communal areas, roofs etc, that they are paying their part of the premium on.

This is just providing more information for the flatowner and does not affect the way that the Insurance works, which is for the whole block of flats.

rs65

huckster wrote: »

In Scotland, I believe that they have to by law, state what sum Insured is in respect of the flat only and what the sum insured is which includes communal areas, roofs etc, that they are paying their part of the premium on.

I had a flat in Scotland and I've never heard of that (sold it in 2004 though). Survey report just had one reinstatement value.

huckster

rs65 wrote: »

I had a flat in Scotland and I've never heard of that (sold it in 2004 though). Survey report just had one reinstatement value.

Depends on the legal situation with the flat. I had just heard that with factors, there was more information provided to the flat owners.