Buildings Insurance Overcharge

ray67

I have moved into a new development of 6 flats. Prior to purchasing we were told the Buildings Insurance would be based on a Reinstatement Valuation of circa £2.5m.
After we all moved in we were subsequently told that the developer advised the insurers that the reinstatement value is now £4.5m and our premiums (which we have all paid to date) are more than double what we were originally told they were going to be.
All the residents have today organised an independent Chartered Surveyor to do a reinstatement value survey. Our factors have said that if the valuation is lower than the current £4.5m valuation the premiums going forward will be adjusted accordingly but the valuation cannot be applied retrospectively to what we have paid to date. i.e. they will not refund the amount we have been potentially overcharged to date. Surely if the valuation is lower we are entitled to be refunded for the amount we have in effect overpaid to date? If yes, how do we go about getting that refund?

dunstonh

Surely if the valuation is lower we are entitled to be refunded for the amount we have in effect overpaid to date? If yes, how do we go about getting that refund?

Property does not have a price tag on it.   You either get a professional valuation or you estimate.  If you later get a professional valuation then that would only apply going forward.  Not retrospectively.

You either make a judgment call and add some margin or pay to get a professional. The former saves the cost of employing a professional but could lead to under or overpaying. The latter costs money but gives a figure that an insurer would likely accept in the event of a claim.

retiredbanker1

What is this valuation they have made?
Is it the total value of the 6 flats on the open market or re-build cost in the event of a catastrophic event?

It should be the latter.

DullGreyGuy

retiredbanker1 said:

What is this valuation they have made?
Is it the total value of the 6 flats on the open market or re-build cost in the event of a catastrophic event?

It should be the latter.

It will be rebuild including the realistic worst case cost of having to clear the site to enable the rebuild (eg major fire and having to knock down and clear the remaining ruin)