Home Insurance increase

bctech

I live in a Glasgow tenement flat and my house insurance has just increased from £85/quarter to £305/quarter. I questioned the factor and was told the cost to rebuild the tenement (8 flats) has increased from £1.2 million to £4.6million hence the increase.
The building is now insured for £5.6million, with 8 flats (2 of which are basement flats worth less) split 8 ways each flat is insured for £700,000. The market value is currently £190,000.
This seems like exorbitant over insurance, and I imagine no insurance company would pay out £700K on a £190K flat so how can they charge such high premiums?
Is there an insurance ombudsman I can appeal to?

societys_child

It doesn't just cover the value of the flat. If it fell down and or caught fire causing damage to surrounding properties. Who pays for the multi million pound clean up afterwards? What if people died etc etc . .

bctech

Well if it caught fire and damaged other properties, then their insurance would pay for their damage.
As for the multi million pounds clean up, It's a Glasgow tenement, not a high rise.
I still think insurance of £5.6 million for a Glasgow tenement is exorbitant.
A premium increase from £255 to £915 per flat seems very steep.

Brodiebobs

Sounds like it might have been severely under insured previously.

Where has the revised rebuild cost come from?

I'm assuming a survey has been carried out to increase it so much, I would ask whoever arranges the insurance to let you see the a copy of the rebuild valuation or their rationale for increasing so much.There are also lots of places online you can calculate rebuild costs yourself.

Don't forget its not just the cost of bricks its architects, demolition, removal of debris, planning consents, etc etc.

And market value has nothing to do with rebuild value, you can buy a house for £10,000 some places but it would cost at least 5X that if you were to rebuild it from ground up.

DannyPearce90

Unfortunately there is nobody to appeal to in this instance as they are entitled to set their own pricing. Doesn't seem fair does it.

Brodiebobs

DannyPearce90 wrote: »

Unfortunately there is nobody to appeal to in this instance as they are entitled to set their own pricing. Doesn't seem fair does it.

The price has increased because someone (im assuming the tenant association or committee) has told them to increase the sums insured.

They haven't just increased premium for no reason.

OP needs to find out who instructed the increase and why, have they re-marketed and got other quotes to check its the market rate rather than appealing to an ombudsman or slating the insurance co.