Building Insurance attached to lease

Doslos

I have a property and the building insurance is attached to the lease. The average insurance paid a year in the area on a similar property is between £250 and £288 but I'm being forced to pay £560.00. Is there a way this can be contested, is there a way out; at least to buy my insurance from a firm of my choice? Please advise.
BASED ON RESPONSES RECEIVED SO FAR I ADD: The flat is a converted one. The building used to be a house but converted to Two 2-bedroom Flats and a bedsit. I have never made any claims since I bought the Flat in September 2004. The flood is not in Flood risk area nor in any high risk area. The policy includes unnecessary contents such as terrorism which is not needed or necessary.

cattie

It is usual to have to take the buildings insurance via the freeholder or managing agent for leasehold properties as a condition of the lease.


If the property is in a block then the insurance will cost more than that of a single dwelling. Many insurers will not accept individual customers who live in a building with more than 2 dwellings.

I grant you that £560 sounds high, but without knowing more details of the property, such as if there have been any past claims on the building or if it's in a flood risk area for example, then it's difficult to judge whether this is an exceedingly high charge.

dmg24

£560 is a crazy amount - does that definitely not include anything else (management fee etc)?

If you are in a block then you could take the right to management route. More information is available at https://www.lease-advice.org.

x_Wilco_x

We had this when I lived in a leasehold apartment. The freeholder insisted on it's own chosen insurer for the block buildings insurance and even though the management company had subitted alternatives which were well over half the premium amount, to the freeholder company, they would not budge - something about commission earned I believe!!

I even remember after 2001 having to pay for extra terrorism insurance because the freeholder insisted even though we were a very non-discript new build development in the middle of nowhere special!!!

cattie

Based on what you have added to your post, your insurance does sound incredibly high if the charge is for insurance alone & no management fee of any kind.

Perhaps terrorism insurance in this day & age is something not to be dismissed. We live in dangerous times with crazy fundamentalists doing terrible things in the name of religion & who knows where it will end.

If it doesn't add much to the policy the peace of mind may be worth it, for who knows what tomorrow will bring?

dmg24

I do have terrorism included in my insurance, but it is only £10 extra a year, so this should not make a huge difference. For the sake of £10, I am happier to have terrorism insurance than risk the possibility of no home and no insurance to have it rebuilt.

Could I ask how much your building is insured for? You need to breakdown what the amount covers for us to give more specific advice.

Doslos

dmg24 wrote: »

I do have terrorism included in my insurance, but it is only £10 extra a year, so this should not make a huge difference. For the sake of £10, I am happier to have terrorism insurance than risk the possibility of no home and no insurance to have it rebuilt.

Could I ask how much your building is insured for? You need to breakdown what the amount covers for us to give more specific advice.

COVER FOR THE BUILDING (I GUESS THIS IS NOT JUST FOR MY FLAT) IS £420,551.

EdInvestor

Freeholders are legally allowed to make a profit on the buildings insurance from leaseholders and they do.

More details on
https://www.lease-advice.org.uk

dmg24

... and you are sure that this does not include a management charge also?

If there are only three of you, I really would look at RTM.

Doslos

It does not state any management charge. This is what the policy says...
The Insurer: Norwich Union Insurance Ltd
Agency: M...... Insurance Services Ltd
The Insured: P....... Properties Ltd
Business: Business Owners

dmg24

Is the insurance policy just for your property? Do the neighbours also pay the same amount?