Insurance Issue for Property containing 3 Flats

Strebor123

Hi,

I am own a flat in a property with 2 other flats. Between the three of us we own the freehold for the entire property. Back in 2020 our insurance was ~£450 a year. Last year it was £650. Our renewal this year has come in at £860 with another insurer coming in at £950. They can't explain what is causing the price increases aside from "inflation".

If we arrange our own insurance it's ~£110 each (so £330 total) but we are concerned about the communal areas not being covered. Just wondering if anyone else has been in this situation and what you did to resolve it?

Thanks!

propertyrental

What do your leases say in regards to who has to insure? Please quote.

Irrespective of that, there are all sorts of complications where 3 separate policies are taken out for the same building.

I assume you've had quotes from a reputable insurance broker who specialises in block building policies?

Strebor123

propertyrental said:

What do your leases say in regards to who has to insure? Please quote.

Irrespective of that, there are all sorts of complications where 3 separate policies are taken out for the same building.

I assume you've had quotes from a reputable insurance broker who specialises in block building policies?

It's the freeholders responsibility. The leaseholders are also the freeholders.

We have had a few quotes. Towergate, Arthur J Gallagher and Associated Insurance Services. All unreasonably expensive quotes to insure 3 flats. I understand the issues with taking out seperate policies but also struggling to justify paying ~£850-900 for insurance when insuring individually is almost 1/3 of the price.

cr1mson

You are comparing apples with pears!

The 3 individual policies are not the same as one policy as block policies cover a wider variety of circumstances as your liability is different.

Also what happens if a claim is made that is not covered then you could have saved on the insurance only to have a massive liabilty to meet.

Strebor123

cr1mson said:

You are comparing apples with pears!

The 3 individual policies are not the same as one policy as block policies cover a wider variety of circumstances as your liability is different.

Also what happens if a claim is made that is not covered then you could have saved on the insurance only to have a massive liabilty to meet.

That's why I'm trying to find out what other people have done. I can't fathom the price difference for why the price is so much higher just to cover the communal areas. The insurance cover is exactly the same, so it's not comparing apples to pears. I don't understand why it's almost 3x the price to insure all 3 flats together vs individually insuring them.

cr1mson

It is not just covering the communal areas a block insurance policy will be different in other ways too. There is also the issue of excesses (3 policies = 3 excesses) as well as the nightmare of double insurance and the ensuing discussions as to which insurance pays for what!

user1977

I'm not sure to what extent the considerations are different, but it's pretty commonplace in Scotland (where all flats are freehold) for there not to be a block policy and everyone just gets their own. Obviously it makes things more complex when there's a claim affecting more than one flat, but it's not a fundamental problem.

NameUnavailable

Let's say there was an accident which meant that the building had to be demolished and rebuilt. How would that work with no communal areas? (presumably this would include a hallway and staircase leading to the upper floors?). What if the ground or middle flat didn't get insurance? Who insures the roof? 

If you just want to save money you could just not bother with the insurance at all which is probably better than buying policies which won't pay out because you've bought the wrong kind of insurance. If any of you have a mortgage you'd also be probably breaching the conditions of that by not having proper insurance.