Is a £600 buildings insurance charge excessive for a 2 bedroom 1930s flat in outer London. 5 July 2022 at 1:13PM edited 5 July 2022 at 1:36PM in Insurance & life assurance 23 replies 242 views

Mabel2012

My freeholder arranges the building insurance for a small block of 12 maisonettes, each with their own front door. The total cost is apportioned on the square footage of each flat. My portion is 1/10th as the flats my part of the block are a bit larger. I agree with the split. I don't agree with the overall price and I think the landlord is profiteering.

I obtained a quote for my flat only from a Which? Recommended Provider and the prices ranged from £350 to £380 depending on the level of cover.

I also obtained quotes from Compare the Marker and the prices ranged from £114.95 Hastings Essential policy to £342.85 Admiral Platinum policy.

   

Does anyone have any examples of insurance costs from their freeholder for a similar sized flat in outer London.

Smithcom

The quotations that you obtained, which parts of the buildings are they covering?  Roof/foundations/walls?  

How much premium are you being asked to pay?

What is the Buildings Sum Insured / any previous claims or losses for the freeholder / construction of building including floors / Age of Building / Listed? / Any unoccupied flats / 

MalMonroe

Can't you ask to see the details and information on insurance that your freeholder must have?

And is it compulsory to go with the insurance that the freeholder chooses?

How do you know that you aren't being ripped off if you never see any documentation at all?

That's the first thing I'd be looking at. Where are the details and who is the insurer. 

Ask to see the documents. Surely that must be allowed?

Mabel2012

Smithcom said:

The quotations that you obtained, which parts of the buildings are they covering?  Roof/foundations/walls?  

How much premium are you being asked to pay?

What is the Buildings Sum Insured / any previous claims or losses for the freeholder / construction of building including floors / Age of Building / Listed? / Any unoccupied flats / 

The block is brick construction with a tiled roof and was built around 1936/37. It is not listed. There are just a ground floor and first floor with internal wooden stairs. The upper flat has a wrought iron fire staircase.
The premium of just over £600 annually covers my flat only. I only know the details for my insurance policy.  I assumed the freeholder will get a more competitive price as he is insuring the whole block. I don't know the sum insured for the whole block but following a recent fire insurance valuation the declared valuation of my flat is £212,000. The floor area of my flat is 1/10 of the whole block. So the block valuation is x 10 based on size  or x12 based on the number of flats in the block multiplied by the £212,000 figure.

All flats are occupied. The freeholder still owns one of the twelve flats and the other eight are rented out by the leaseholders. All flats have their own street door so the only communal areas are the entrance paths and the boundary walls of the block Each leaseholder is responsible for maintaining their own flat and garden. 

I'm the only one who queries any charge. I spoke to a neighbour who owns her flat and she said she just pays as she is too busy to worry as the charges are not as high as a friends who lives in a posh block with lovely gardens and lifts.  The insurance would be higher for that. Seemingly the cost of living crisis has not affected her.

I hoped other leaseholders would share their insurance premium but they seem shy or they don't know what they are paying.

Mabel2012

MalMonroe said:

Can't you ask to see the details and information on insurance that your freeholder must have?

And is it compulsory to go with the insurance that the freeholder chooses?

How do you know that you aren't being ripped off if you never see any documentation at all?

That's the first thing I'd be looking at. Where are the details and who is the insurer. 

Ask to see the documents. Surely that must be allowed?

How much do you pay for your flat insurance?

TELLIT01

The only way to make an accurate comparison is to get a quote for buildings insurance for the whole block, not just insurance for one flat.

Mabel2012

TELLIT01 said:

The only way to make an accurate comparison is to get a quote for buildings insurance for the whole block, not just insurance for one flat.

As I don't own the block or manage the whole block I;m not allowed to get a block policy quote. I tried yesterday.

eddddy

Freeholders do sometimes earn hefty commission on buildings insurance - which effectively increases the cost to leaseholders.

You could try asking the freeholder questions like:

• Do they earn any commission or fees in relation to the buildings insurance?
• If so, how much?
• Did they get competitive insurance quotes at the last renewal? If so, what were they?

The freeholder probably isn't required by law to tell you - but if they volunteer to, perhaps that's a sign that they're fair and trustworthy.

If they refuse, I guess you can continue to investigate further.

Brie

If you are paying 1/10th of the whole premium then you should have sight of the policy/invoice to prove that.  You also need this in case you need to make a claim - sometimes the freeholder may not be available and you need to get things moving due to a leak/storm damage/whatever.  So you need a copy of the document so you know the policy number and who to ring as well as what the actual cover is for.

Inlaws flat was a right nightmare and the freeholder tried to scam them several times thinking that an elderly couple wouldn't argue.  FiL could argue for England and MiL is so nice no one would ever say no to her.  Great combo!

diystarter7

Find out what is covered by the 600 quid

Then get like for like quotes, ie same block, all rentals, history of claims, etc, etc

You will then get a better idea, then try to work out an average.

On the face of it it seems steep but there could have been claims/etc and location

Smithcom

Mabel2012 said:

Smithcom said:

The quotations that you obtained, which parts of the buildings are they covering?  Roof/foundations/walls?  

How much premium are you being asked to pay?

What is the Buildings Sum Insured / any previous claims or losses for the freeholder / construction of building including floors / Age of Building / Listed? / Any unoccupied flats / 

The block is brick construction with a tiled roof and was built around 1936/37. It is not listed. There are just a ground floor and first floor with internal wooden stairs. The upper flat has a wrought iron fire staircase.
The premium of just over £600 annually covers my flat only. I only know the details for my insurance policy.  I assumed the freeholder will get a more competitive price as he is insuring the whole block. I don't know the sum insured for the whole block but following a recent fire insurance valuation the declared valuation of my flat is £212,000. The floor area of my flat is 1/10 of the whole block. So the block valuation is x 10 based on size  or x12 based on the number of flats in the block multiplied by the £212,000 figure.

All flats are occupied. The freeholder still owns one of the twelve flats and the other eight are rented out by the leaseholders. All flats have their own street door so the only communal areas are the entrance paths and the boundary walls of the block Each leaseholder is responsible for maintaining their own flat and garden. 

I'm the only one who queries any charge. I spoke to a neighbour who owns her flat and she said she just pays as she is too busy to worry as the charges are not as high as a friends who lives in a posh block with lovely gardens and lifts.  The insurance would be higher for that. Seemingly the cost of living crisis has not affected her.

I hoped other leaseholders would share their insurance premium but they seem shy or they don't know what they are paying.

On the face of it, your £600 could be expensive, but maybe not.   Depends on so many risk factors, including claims history.

You maybe need to have a conversation with the freeholder to see what enquiries have been made in the pursuit of a competitive premium.