Buildings Insurance for London Flat

Yoda123

I own a 2-bed flat in a block of 42 flats in South London.  The flat is probably worth 350-400K and I am paying £700 a year buildings insurance (through management company).   Instinctively, this seems high to me although I don't really have anything to compare it to.   I'd appreciate it if anyone who owns a similar flat in London could share what they are paying for building insurance...

DullGreyGuy

We are a lowrise block of 34 flats in zone 2 London and our proportion of the insurance is £470.

1) What your flat is worth is irrelevant, buildings insurance covers the cost of rebuilding the block which is unrelated to the value of the property. In some places rebuild is much higher, in others its much lower than the retail value of the property.

2) You need to see how your bills are split, in our current place its an equal split between all units. In our last place is was based on square footage and so the large 4 bed penthouse paid much more than the tiny studio flats. 

A lot will depend on the nature of the building etc... high rise are more expensive than low rise, multiple lifts add to the price, swimming pools too. Plus naturally the claims history, a few EoW or a suspected subsidence claim and your premiums will rocket.

Unfortunately block insurance is a form of commercial insurance and as such tends to be more expensive as companies buy more on quality of cover or relationships etc than purely on price (not that all commercial policies provide good quality)

eddddy

Market value (£350k to £400k) isn't a very good indicator of expected buildings insurance premiums.

Things like rebuild cost, type of construction, levels of excess, and claims history will have a major impact.

Have you seen a copy of the freeholder's insurance policy? As you may know, you have a legal right to see it. That should show things like the claims history.

(Blocks of flats are notorious for "escape of water" claims. If there have been a some of those, that could push premiums sky-high.)


See: https://www.lease-advice.org/template-document/leaseholders-notice-inspection-insurance-policy-etc-section-30a-paragraph-3-schedule-landlord-tenant-act-1985/



As a stating point you can also ask the managing agent...

• At the last renewal, did the managing agent get any competitive quotes for buildings insurance?  How / why was the current insurer selected?

• Does the freeholder or managing agent receive any commission or other payment from a broker or insurer in respect of the buildings insurance

(TBH, case law suggests that they're not required to get competitive quotes, and it's legal for them to earn commission - even if it's a bit shady - but maybe it's still worth asking.)