Incredible Increase In Leasehold Building Insurance

HUMBUG

I'm a leaseholder who lives in a 1 bedroom ground floor maisonnette of a converted terraced house while my freeholder lives in the one above me. 

The freeholder arranges the building insurance and I pay 50% of the premium every year. 

Look at how the cost of building insurance has leapt in the last few years.

2020/21 - Total Landlord Insurance - Underwritten Allianz Insurance Plc = £597.18
2021/22 - Hamilton Fraser  Broker - Underwritten by Axis & Folgate = £637
2022/23-   Arthur J Gallaghers  -  Covea  = £539   (this must have been an exception to the norm)
2023/24 - 1st Sure Block Of Flats Insurance - Underwritten Covea = £650
2024/25 - 1st Sure Block Of Flats Insurance - Axa Insurance = £791
2025/26  - 1st Sure Block Of Flats Insurance - Axa Insurance =£870

I haven't paid the 2025/26 premium as its due to be paid on the 28th March , so I did some shopping around via various Brokers:

I contacted Arthur J Gallaghers again and they quoted £1200  while Adrian Flux quoted £1600. 

Does anyone have any explanation as to why there is such a wide variation in quotes?  If this wasn't leasehold insurance and I was an owner of a 3 bedroomed terrace house , my building insurance would probably be less than £300 pa in the 'London/Greater London' area. So we are talking about a 290% increase in premiums just because its categorised under leasehold insurance.

The last 2  insurance brokers I contacted are charging 400% and 534% more just because it's categorised as leasehold insurance.

DullGreyGuy

HUMBUG said:

I'm a leaseholder who lives in a 1 bedroom ground floor maisonnette of a converted terraced house while my freeholder lives in the one above me. 

The freeholder arranges the building insurance and I pay 50% of the premium every year. 

Look at how the cost of building insurance has leapt in the last few years.

2020/21 - Total Landlord Insurance - Underwritten Allianz Insurance Plc = £597.18
2021/22 - Hamilton Fraser  Broker - Underwritten by Axis & Folgate = £637
2022/23-   Arthur J Gallaghers  -  Covea  = £539   (this must have been an exception to the norm)
2023/24 - 1st Sure Block Of Flats Insurance - Underwritten Covea = £650
2024/25 - 1st Sure Block Of Flats Insurance - Axa Insurance = £791
2025/26  - 1st Sure Block Of Flats Insurance - Axa Insurance =£870

I haven't paid the 2025/26 premium as its due to be paid on the 28th March , so I did some shopping around via various Brokers:

I contacted Arthur J Gallaghers again and they quoted £1200  while Adrian Flux quoted £1600. 

Does anyone have any explanation as to why there is such a wide variation in quotes?  If this wasn't leasehold insurance and I was an owner of a 3 bedroomed terrace house , my building insurance would probably be less than £300 pa in the 'London/Greater London' area. So we are talking about a 290% increase in premiums just because its categorised under leasehold insurance.

The last 2  insurance brokers I contacted are charging 400% and 534% more just because it's categorised as leasehold insurance.

It's nothing to do with it being leasehold, you'd get the same sorts of quote under common hold. It's the fact it isnt a 3 bed house but a pair of flats in a single building. It creates a lot more complexity and scope for larger claims. Building suffers major damage do you think they'll put you in the same hotel room as the occupiers of the flat above?

Home insurance is highly commoditised, insurers make tiny margins but it works, generally, because there are so many properties to be insured there's enough to go round and results are fairly predictable. Block Insurance is commercial insurance not Home, there is much less commercial pressure, losses can be vastly bigger meaning results are much more choppy and so the risk margin has to be larger. Commercial buyers generally want good cover, consumer purchasers typically want cheap premiums no matter how bad the policy. 

HUMBUG

DullGreyGuy said:

HUMBUG said:

I'm a leaseholder who lives in a 1 bedroom ground floor maisonnette of a converted terraced house while my freeholder lives in the one above me. 

The freeholder arranges the building insurance and I pay 50% of the premium every year. 

Look at how the cost of building insurance has leapt in the last few years.

2020/21 - Total Landlord Insurance - Underwritten Allianz Insurance Plc = £597.18
2021/22 - Hamilton Fraser  Broker - Underwritten by Axis & Folgate = £637
2022/23-   Arthur J Gallaghers  -  Covea  = £539   (this must have been an exception to the norm)
2023/24 - 1st Sure Block Of Flats Insurance - Underwritten Covea = £650
2024/25 - 1st Sure Block Of Flats Insurance - Axa Insurance = £791
2025/26  - 1st Sure Block Of Flats Insurance - Axa Insurance =£870

I haven't paid the 2025/26 premium as its due to be paid on the 28th March , so I did some shopping around via various Brokers:

I contacted Arthur J Gallaghers again and they quoted £1200  while Adrian Flux quoted £1600. 

Does anyone have any explanation as to why there is such a wide variation in quotes?  If this wasn't leasehold insurance and I was an owner of a 3 bedroomed terrace house , my building insurance would probably be less than £300 pa in the 'London/Greater London' area. So we are talking about a 290% increase in premiums just because its categorised under leasehold insurance.

The last 2  insurance brokers I contacted are charging 400% and 534% more just because it's categorised as leasehold insurance.

It's nothing to do with it being leasehold, you'd get the same sorts of quote under common hold. It's the fact it isnt a 3 bed house but a pair of flats in a single building. It creates a lot more complexity and scope for larger claims. Building suffers major damage do you think they'll put you in the same hotel room as the occupiers of the flat above?

Home insurance is highly commoditised, insurers make tiny margins but it works, generally, because there are so many properties to be insured there's enough to go round and results are fairly predictable. Block Insurance is commercial insurance not Home, there is much less commercial pressure, losses can be vastly bigger meaning results are much more choppy and so the risk margin has to be larger. Commercial buyers generally want good cover, consumer purchasers typically want cheap premiums no matter how bad the policy. 

I understand that there are some complexities and some extra risks but I don't think that is enough to warrant such huge premiums. 

If insurers are making tiny margins , why have I got a quote for landlord insurance for our building at £478 via Modus (Underwritten by: ERGO UK Specialty Ltd on behalf of Great Lakes Insurance UK Limited) but then £1600 as the cheapest quote from Adrian Flux for leasehold insurance (who is also a broker for Modus). 

The customer service person at Adrian Flux said I shouldn't accept that online quote from Modus because it related to landlord building insurance . That Modus was not offering anything like that quote for leasehold building insurance.

Yet the schedule and cover was almost exactly the same for landlord insurance versus leasehold insurance.

Can you explain why the premiums cost  £478  for landlord insurance but greater than £1600 for leasehold (using the same insurance company) where the schedule of cover is almost identical?

DullGreyGuy

HUMBUG said:

DullGreyGuy said:

HUMBUG said:

I'm a leaseholder who lives in a 1 bedroom ground floor maisonnette of a converted terraced house while my freeholder lives in the one above me. 

The freeholder arranges the building insurance and I pay 50% of the premium every year. 

Look at how the cost of building insurance has leapt in the last few years.

2020/21 - Total Landlord Insurance - Underwritten Allianz Insurance Plc = £597.18
2021/22 - Hamilton Fraser  Broker - Underwritten by Axis & Folgate = £637
2022/23-   Arthur J Gallaghers  -  Covea  = £539   (this must have been an exception to the norm)
2023/24 - 1st Sure Block Of Flats Insurance - Underwritten Covea = £650
2024/25 - 1st Sure Block Of Flats Insurance - Axa Insurance = £791
2025/26  - 1st Sure Block Of Flats Insurance - Axa Insurance =£870

I haven't paid the 2025/26 premium as its due to be paid on the 28th March , so I did some shopping around via various Brokers:

I contacted Arthur J Gallaghers again and they quoted £1200  while Adrian Flux quoted £1600. 

Does anyone have any explanation as to why there is such a wide variation in quotes?  If this wasn't leasehold insurance and I was an owner of a 3 bedroomed terrace house , my building insurance would probably be less than £300 pa in the 'London/Greater London' area. So we are talking about a 290% increase in premiums just because its categorised under leasehold insurance.

The last 2  insurance brokers I contacted are charging 400% and 534% more just because it's categorised as leasehold insurance.

It's nothing to do with it being leasehold, you'd get the same sorts of quote under common hold. It's the fact it isnt a 3 bed house but a pair of flats in a single building. It creates a lot more complexity and scope for larger claims. Building suffers major damage do you think they'll put you in the same hotel room as the occupiers of the flat above?

Home insurance is highly commoditised, insurers make tiny margins but it works, generally, because there are so many properties to be insured there's enough to go round and results are fairly predictable. Block Insurance is commercial insurance not Home, there is much less commercial pressure, losses can be vastly bigger meaning results are much more choppy and so the risk margin has to be larger. Commercial buyers generally want good cover, consumer purchasers typically want cheap premiums no matter how bad the policy. 

I understand that there are some complexities and some extra risks but I don't think that is enough to warrant such huge premiums. 

If insurers are making tiny margins , why have I got a quote for landlord insurance for our building at £478 via Modus (Underwritten by: ERGO UK Specialty Ltd on behalf of Great Lakes Insurance UK Limited) but then £1600 as the cheapest quote from Adrian Flux for leasehold insurance (who is also a broker for Modus). 

The customer service person at Adrian Flux said I shouldn't accept that online quote from Modus because it related to landlord building insurance . That Modus was not offering anything like that quote for leasehold building insurance.

Yet the schedule and cover was almost exactly the same for landlord insurance versus leasehold insurance.

Can you explain why the premiums cost  £478  for landlord insurance but greater than £1600 for leasehold (using the same insurance company) where the schedule of cover is almost identical?

You need to read the second part about the difference between commercial property insurance and consumer home insurance. 

Do a quote for a random house, pretending its freehold to start with and then that its leasehold... there will be no difference at all because insurers dont even ask how the property is held. Its not the way its held, its the fact its a block of flats with multiple dwellings 

You could do a change of the lease such that you each insure your individual flats separately and then you could get standard Landlords insurance each, this is how its traditionally done in Scotland where there isnt a freeholder being responsible to insurer the whole building. Note however there can be complications of individual insurances, say there was a significant fire that damaged upstairs, including the roof meaning the dwelling is no longer watertight. You're going to have to wait for the two insurers to argue about who pays for the roof, your insurers cannot fix your damage until the building is watertight again and that assumes upstairs has insurance, they could have forgotten to renew it and your insurers won't pay to do all the repairs on their own.