Landlord Insurance

Herbalus

A friend down the pub [and yes, it is a friend, check my other posts and you'll find I've only just bought my own house this year ], has a flat they rent out, and their landlord insurance is up for renewal in August. It seems expensive, so as the pub's "money saving guy" they asked me to look it over. The form is curious - the renewal quote is from an insurance agent with a recommended provider.

Cover is £550 including agent's £25 admin and £42 optional legal. Rent is c.£10k per year, flat worth £240k. Loss of rent is included *I think* but it's covered up to 33% of the buildings value, so I don't quite understand what that means...? Can any of the posters with experience in this area advise if that's expensive?

The fact that they've got an empty box where the alternative quotes are meant to be makes me suspicious, but I don't know if this is normal. I wonder if the management company might have a requirement to use this particular insurer? Is that something they could insist on?

EDIT: it's in England.

dacouch

Is this in Scotland?

G_M

Herbalus wrote: »

The form is curious - the renewal quote is from an insurance agent with a recommended provider.
this is normal

Cover is £550 including agent's £25 admin and £42 optional legal.
* agent's fee is normal. The quote may easily still be cheaper than going direct to the insurer
* legal is an optional extra. Quite useful if the LL is not a member of a LL's Association (which offers legal advice), but up to him
Rent is c.£10k per year, flat worth £240k. Loss of rent is included *I think* but it's covered up to 33% of the buildings value, so I don't quite understand what that means...?
maximum claim for loss of rent is £80K (240/3). This presumably kicks in if an insured event occurs (eg fire), so he claims not just cost of rebuilding/renovating the flat after a fire, but also the rent is misses out on as a result
Can any of the posters with experience in this area advise if that's expensive?
Sounds pricey, but see below

The fact that they've got an empty box where the alternative quotes are meant to be makes me suspicious, but I don't know if this is normal.
yes normal.
I wonder if the management company might have a requirement to use this particular insurer? Is that something they could insist on?
You'd have to read the lease!

EDIT: it's in England.

1) it's usual with flats for the freeholder to insure the building, not the leaseholder. Your friend should check his lease!

2) when buying/renewing any insurance (car, buildings, travel, death etc) it is sensible to shop around.

Check wth another broker or just go online and put in the property details for a quote. Don't forget to read/compare the policy documents though.

dacouch

G_M wrote: »

1) it's usual with flats for the freeholder to insure the building, not the leaseholder. Your friend should check his lease!

Hence my question re Scotland which the OP has thanked me for but not answered

chris_m

dacouch wrote: »

Hence my question re Scotland which the OP has thanked me for but not answered

He has - he edited his original post.

dacouch

chris_m wrote: »

He has - he edited his original post.

In which case he needs to follow GM's advice as it's relatively unusual to insure flats individually and ignoring the price issues it's not a good idea.

Check the lease and service charges for details of building insurance

Herbalus

Turns out there's no mention of a particular insurer on the lease, just that it has to be insured. Seems bizarre that each leasehold flat has to have buildings insurance separately now you mention it, as the freeholder technically owns the building I suppose.

But just now I got him to put the details on the renewal notice into the first landlord insurance quote engine I could think of - in this case direct line - and the quote was half the price.

Looks like he owes me a few beers

G_M

Herbalus wrote: »

Turns out there's no mention of a particular insurer on the lease, just that it has to be insured. by who......? Seems bizarre that each leasehold flat has to have buildings insurance separately now you mention it, as the freeholder technically owns the building I suppose.

The lease will not (usually) specify a particular insurer to use.

But it will (usually) specify who is responsible for taking out the insurance cover, and as explained already, it is usually the freeholder. That is what your friend should be checking in the lease!

Does your friend pay an annual service or maintenance charge? Who to? And more relevantly, what for?

dacouch

Herbalus wrote: »

Turns out there's no mention of a particular insurer on the lease, just that it has to be insured. Seems bizarre that each leasehold flat has to have buildings insurance separately now you mention it, as the freeholder technically owns the building I suppose.

But just now I got him to put the details on the renewal notice into the first landlord insurance quote engine I could think of - in this case direct line - and the quote was half the price.

Looks like he owes me a few beers

Don't rush into buying cover, follow GM's advice in the post previous to this one.

What do you think will happen if the whole property burns down or suffers subsidence and each flat has their own insurance with say five different Insurers to deal with all working at different speeds.

What do you think will happen in the above scenario if one of the flats did not have insurance and there was not enough cover to rebuild the block.

Incidently, does the block have any flat roof as it can make a huge difference to the premium. You need to check this with your friend

jamei305

I have two leasehold flats, one insured for £84 a year the other for £78. The freeholder insures the block but this is for contents and fixtures & fittings, basically everything inside the four walls of the flat. More importantly it includes liability insurance in case, for example, water leaks out and damages the building below.

Are you sure when you say in the lease "that it has to be insured" it isn't talking about this kind of insurance?