Buildings Insurance Doubled!

bf2011

Hi everyone,
We’re leaseholders in a small new build development where two Victorian houses have been converted into 7 flats. The property managment agent who has proven their incompetence over the last few years have just sent us our service charge which includes the doubling of our buildings insurance from £2,300 to £4,600. They’ve cited the additional costs that the insurance industry is having to bear in the wake of the grenfell disaster and reduced competition in the market as a number of providers have withdrawn from the buildings insurance market. Is this a plausible explanation for the doubling of the insurance or is this something we have grounds to challenge?

There is no form of cladding on our building so there is no greater risk on our specific property although I appreciate this may be irrelevant.

Any views greatly appreciated  🙂

Sandtree

This is really a question about leasehold charges than insurance, there are some knowledgeable people in the house buying forum on here.

My understanding is that costs have to be "reasonable" rather than cheap. Your mechanism of challenge is going to a tribunal if you feel their charges are excessive rather than reasonable. Initially I'd be asking if the premiums were rebrokered (by the sounds of it they were) or if they have tried another brokerage. 

Smithcom

Their explanation does not hold water.   Commercial buildings premiums are increasing, for sure, but not by 100%.   All things being equal, 10-15% is a fair reflection of market increases currently.
Something else is at play, either claims, flood risk, change to policy cover/sums insured etc.
DM

MattMattMattUK

Smithcom said:

Their explanation does not hold water.   Commercial buildings premiums are increasing, for sure, but not by 100%.   All things being equal, 10-15% is a fair reflection of market increases currently.
Something else is at play, either claims, flood risk, change to policy cover/sums insured etc.
DM

My suspicion would be the fee that they pay themselves for "management" rather than anything else.

user1977

MattMattMattUK said:

Smithcom said:

Their explanation does not hold water.   Commercial buildings premiums are increasing, for sure, but not by 100%.   All things being equal, 10-15% is a fair reflection of market increases currently.
Something else is at play, either claims, flood risk, change to policy cover/sums insured etc.
DM

My suspicion would be the fee that they pay themselves for "management" rather than anything else.

Expensive lunches between the managing agent and their insurance brokers have to be paid for somehow...

Smithcom

user1977 said:

MattMattMattUK said:

Smithcom said:

Their explanation does not hold water.   Commercial buildings premiums are increasing, for sure, but not by 100%.   All things being equal, 10-15% is a fair reflection of market increases currently.
Something else is at play, either claims, flood risk, change to policy cover/sums insured etc.
DM

My suspicion would be the fee that they pay themselves for "management" rather than anything else.

Expensive lunches between the managing agent and their insurance brokers have to be paid for somehow...

A slightly lazy answer I feel.   I think that the OP needs to find out exactly why the premium has increased so dramatically.  There must be a more credible answer, rather than the managing agent and broker needing more money to enjoy an expensive jolly.  
SC

csgohan4

Smithcom said:

user1977 said:

MattMattMattUK said:

Smithcom said:

Their explanation does not hold water.   Commercial buildings premiums are increasing, for sure, but not by 100%.   All things being equal, 10-15% is a fair reflection of market increases currently.
Something else is at play, either claims, flood risk, change to policy cover/sums insured etc.
DM

My suspicion would be the fee that they pay themselves for "management" rather than anything else.

Expensive lunches between the managing agent and their insurance brokers have to be paid for somehow...

A slightly lazy answer I feel.   I think that the OP needs to find out exactly why the premium has increased so dramatically.  There must be a more credible answer, rather than the managing agent and broker needing more money to enjoy an expensive jolly.  
SC

The question is how realistic the OP will get that answer in a timely manner. The OP can demand to see the quotes obtained or at least the breakdown

Given the apathy of leaseholders, you will unlikely get a majority to take over management.