Is a £600 buildings insurance charge excessive for a 2 bedroom 1930s flat in outer London. 5 July 2022 at 2:13PM edited 5 July 2022 at 2:36PM in Insurance & life assurance 23 replies 241 views

Sandtree

Mabel2012 said:

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.

You can always get a quote, you dont have an insurable interest so cannot go on to buy it but that's a separate matter. 

Block insurance is commercial property insurance and the underwriting process and premiums are notably different to consumer insurance. Unlike consumers corporate buyers dont switch insurance to save £1 and so there hasn't been a race to the bottom in premiums and covers. A broker should be able to give you indicative quotes as long as you have a sensible rebuild cost for the whole building and know the claims history. In many cases they will not be able to give an actual quote because the insurer's fairly often want a building survey.

Remember that freeholders dont have to get the cheapest option, the only requirement is that the charges are reasonable/not excessive . 

Mabel2012

Smithcom said:

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.

I know when I last complained about the cost back in 2018 there was a ten year history of claims paid of just under 20,000 all water related. None of them mine as I have never made a claim.

Why is nobody telling me the amount they are paying in insurance for their 2 bed flat in similar circumstances. It is only by seeing other prices that can I guage if my price is excessive.

Sandtree

Our share of the block insurance is £450 which is a 1/34th share as its split evenly across all flats even though they are a mix of 1 and 2 beds, single floor and double floor. 

No idea on the claims history but as a building erected in 2005 its probably lighter on the claims side. 

Mabel2012

diystarter7 said:

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

It is a comprehensive policy with accidental damage.

I can't get a quote for a block policy. Commercial insurance brokers will not quote me because I do not manage the block and I can't supply answers like the valuation, size of block etc. I can only answer for my flat.

Still waiting for someone to tell me about their insurance.

Mabel2012

Sandtree said:

Our share of the block insurance is £450 which is a 1/34th share as its split evenly across all flats even though they are a mix of 1 and 2 beds, single floor and double floor. 

No idea on the claims history but as a building erected in 2005 its probably lighter on the claims side. 

Thank you. I would find that figure acceptable as I know the management company add their fees to the actual policy amount.

I'm going to try again to get a block quote but I don't hold much hope as I will have to deal with the commercial insurance brokers.

Sandtree

Mabel2012 said:

Sandtree said:

Our share of the block insurance is £450 which is a 1/34th share as its split evenly across all flats even though they are a mix of 1 and 2 beds, single floor and double floor. 

No idea on the claims history but as a building erected in 2005 its probably lighter on the claims side. 

Thank you. I would find that figure acceptable as I know the management company add their fees to the actual policy amount.

I'm going to try again to get a block quote but I don't hold much hope as I will have to deal with the commercial insurance brokers.

The policy amount is what the broker is charging them, there is a separate £9,000 line for the agents themselves, £11,000 line for their sister cleaning company and various other bills.

Do any of these third party elements give an undeclared kickback? Or is £20k enough for sending a cleaner once a week and collecting the monies twice a year?

Mabel2012

No luck getting a quote for a block policy. It seems I have to find a broker to obtain a quote on my behalf. I emailed BIBA to ask for details of a broker as their phone line was not taking calls and await their reply. I think I'm whistling in the wind. Commercial insurance is a whole new ball game.

I'm beginning to think saving a couple of hundred quid is not worth the anxiety this is causing me.

Mabel2012

Sandtree said:

Mabel2012 said:

Sandtree said:

Our share of the block insurance is £450 which is a 1/34th share as its split evenly across all flats even though they are a mix of 1 and 2 beds, single floor and double floor. 

No idea on the claims history but as a building erected in 2005 its probably lighter on the claims side. 

Thank you. I would find that figure acceptable as I know the management company add their fees to the actual policy amount.

I'm going to try again to get a block quote but I don't hold much hope as I will have to deal with the commercial insurance brokers.

The policy amount is what the broker is charging them, there is a separate £9,000 line for the agents themselves, £11,000 line for their sister cleaning company and various other bills.

Do any of these third party elements give an undeclared kickback? Or is £20k enough for sending a cleaner once a week and collecting the monies twice a year?

I have only seen the price they charge for mine and the my adjacent flat plus their administration fee and my part of the payment. The only communal part is the boundary walls and the path leading to flats as all flats have their own street doors. Each flat is also responsible for maintaining their own gardens. 

Sandtree

Mabel2012 said:

No luck getting a quote for a block policy. It seems I have to find a broker to obtain a quote on my behalf. I emailed BIBA to ask for details of a broker as their phone line was not taking calls and await their reply. I think I'm whistling in the wind. Commercial insurance is a whole new ball game. 

Google "Block Insurance Quote"... you'll find dozens of brokers and other intermediaries with some even claiming to have an online quote system. 

Mabel2012 said:
I have only seen the price they charge for mine and the my adjacent flat plus their administration fee and my part of the payment. The only communal part is the boundary walls and the path leading to flats as all flats have their own street doors. Each flat is also responsible for maintaining their own gardens.  

I'm not up on the leasehold regulations but certainly ours send annual accounts showing a dozen or so line items for the entire block and then reiterating the lease's statement that each unit pays an equal share. There is a load of other lines like refuse collection from the council, water, accountants fees, fire safety certification, banking fees which would all potentially apply even without significant common areas. 

Mabel2012

Sandtree said:

I'm not up on the leasehold regulations but certainly ours send annual accounts showing a dozen or so line items for the entire block.

My annual statement shows the value of any works carried out plus the management fee.  A separate statement lists the ground rent, the amount is stated clearly in the lease and changes every 33 years.  The works relating to my flat and the downstairs flat are split equally between us. If it's repairs to the boundary wall or fence it's split between all twelve. The insurance statement just quotes the amount for my flat. Some years ago they supplied the square footage for each flat and stated the apportionment for the insurance premium.

Your block must have active residents or perhaps it's due to the newness of the block. All of my block was rented out for decades after it was first built. When I bought my flat, the downstairs neighbour told me the whole history of the area and my neighbours as she and her hubby plus 2 sons rented their flat since it was newly built shortly before WW2.

If more leaseholders lived in their flat there may have been a chance of getting them to query charges and ask for supporting information. I have asked the insurance department to note that I wish to see all information relating to the block insurance this year and how my premium is calculated.

I still haven't heard from BIBA. If I get a quote from a broker there will probably be so many caveats - as I may not be able to answer all their questions - that it will not serve my purpose of comparing it to the freeholders insurance quote.

?? Am I right to pursue this for the sake of a possible annual saving of £200, at most ??