£5,000 Excess on building insurance????

LookinForaBargain_2

Hi people, 

I've come here for some advice because I don't know where else to turn at the moment. 

I own a rent apartment in Manchester in a block of 200. It has recently been through the upgrade from the cladding issues. 

I have now been informed that I have a leak which has gone through to 2 flats below. I have contacted the insurance company to make a claim on the buildings insurance only to find out that any claim for escape of water is subject to a ridiculous £5,000 excess on any water claim. 

I contacted the managing agent who explained that this high excess was the ONLY way that they could secure buildings insurance for the property because it was considered 'high risk' due to 6 outstanding escape of water claims. 

Snuck under the radar

When I asked them why landlords / property owners were not notified about this ridiculous excess, they told me that it was all in the insurance documents that was uploaded to the 'customer portal', and that it was up to me to read it. Obviously, it still would have been too late by this point because the insurance had already been taken out. 

I am now in a position where I am paying for buildings insurance which doesn't actually cover me in this instance, unless the damage is substantial. But, even then, I still have a £5k excess. 

In my mind, they have sneakily omitted these details in the hope that nobody would notice. And then they would choose to deal with it on a case-by-vase basis, instead of having 200 property owners on the phone at one time.

I have already paid £2,800 to fix my own apartment but it seems I am now liable to repair the apartments below. 

Can anyone advise on whether I have a legal leg to stand on here, please?

My thinking is that I can 'go legal' and sue to my own property management company (not the managing agent) which looks after the apartment block to reclaim to damages. It is a limited company which has a set of accounts and this is where I pay my service charge. 

In my mind, the managing agent has a duty of service or care to notify property owners of such a high excess, before securing the insurance. 

I have requested that they immediately send a letter to all property owners to notify them of this major issue. 

Any help would be very much appreciated. 

Thanks

DullGreyGuy

LookinForaBargain_2 said:

I've come here for some advice because I don't know where else to turn at the moment. 

I own a rent apartment in Manchester in a block of 200. It has recently been through the upgrade from the cladding issues. 

I have now been informed that I have a leak which has gone through to 2 flats below. I have contacted the insurance company to make a claim on the buildings insurance only to find out that any claim for escape of water is subject to a ridiculous £5,000 excess on any water claim. 

I contacted the managing agent who explained that this high excess was the ONLY way that they could secure buildings insurance for the property because it was considered 'high risk' due to 6 outstanding escape of water claims. 

Snuck under the radar

When I asked them why landlords / property owners were not notified about this ridiculous excess, they told me that it was all in the insurance documents that was uploaded to the 'customer portal', and that it was up to me to read it. Obviously, it still would have been too late by this point because the insurance had already been taken out. 

I am now in a position where I am paying for buildings insurance which doesn't actually cover me in this instance, unless the damage is substantial. But, even then, I still have a £5k excess. 

In my mind, they have sneakily omitted these details in the hope that nobody would notice. And then they would choose to deal with it on a case-by-vase basis, instead of having 200 property owners on the phone at one time.

I have already paid £2,800 to fix my own apartment but it seems I am now liable to repair the apartments below. 

Can anyone advise on whether I have a legal leg to stand on here, please?

My thinking is that I can 'go legal' and sue to my own property management company (not the managing agent) which looks after the apartment block to reclaim to damages. It is a limited company which has a set of accounts and this is where I pay my service charge. 

In my mind, the managing agent has a duty of service or care to notify property owners of such a high excess, before securing the insurance. 

I have requested that they immediately send a letter to all property owners to notify them of this major issue. 

Any help would be very much appreciated. 

Freeholder insurance on a block of flats will be a form of commercial property insurance, not personal lines home insurance. As such excesses tend to be higher in general than most people would select if buying a policy themselves.

Even with Home insurance its common for the excess on Escape of Water to increase after prior Escape of Water claims, its generally higher than the other excess anyway but often will go to £1k or more after a couple of claims. Given Block Insurance starts from a higher initial position excesses of several thousands are not uncommon. 

Realistically it's one of those things where they are damned if they do and damned if they dont. Had your service charge gone up £2,000 because they'd agreed to pay so much more to get a policy with the standard £1,000 excess then I am sure there would have been 200 complaints including from you. Now you want to claim though the £5k for an incident looks worse than paying an extra £2,000 every year to have a £1k excess. 

On the plus side you have a portal where the information is available to you at your leisure, we have to contact the managing agent then wait for them to email it across. I wouldnt be surprised if you look back you've enjoyed lower premiums for the higher excess for a while. 

eddddy

LookinForaBargain_2 said:

I have already paid £2,800 to fix my own apartment but it seems I am now liable to repair the apartments below. 

Why are you having to pay for damage to the flats below?

You would normally only have to pay if, either:

• you were negligent (which is usually quite hard to prove)

• or your lease specifically says that you are responsible for damage resulting from a leak in your flat (which is very unusual, but not unheard of)

More normally, each of the 3 flat owners would be responsible for paying for the repairs to their own flat. And if you did make an insurance claim, the excess would probably be split 3 ways.


But your managing agent (and neighbours) might be very much against you making an 'escape of water' claim, if there have already been 6 others. The premium might sky-rocket even further, and the excess might increase to even more than £5k.

LookinForaBargain_2 said:

I contacted the managing agent who explained that this high excess was the ONLY way that they could secure buildings insurance for the property because it was considered 'high risk' due to 6 outstanding escape of water claims. 

TBH, that sounds very plausible.  Do you think that the Managing Agent is fibbing?

I guess you can ask the Managing Agent if they have any documents (e.g. letters from brokers) that confirm this - but they are probably not obliged to show them to you.

If you really want to "go legal" on this, I'm not sure that there is any specific leasehold legislation that would help you. So it might be a case of suing the Managing Agent for negligence.

(For example, If you believe they were negligent in arranging insurance with a £5k excess, when they could have arranged insurance with a £1k excess for a similar premium - you could try suing them for your consequential loss of £4k.)

WIAWSNB

Hi LFAB.
Were you negligent in any way? Eg, were you aware of the leak? Had one occurred before and you DIYed an unsatisfactory repair? Did you get 'Fred' from the pub to install your bathroom? 
In short, what 'caused' this leak, and could it have been foreseen and reasonably prevented?
Check the policy details. Almost certainly, if you were not negligent, this is not for you to resolve. So pass that information to the affected flats, and tell them the correct procedure is to get the Man Co to sort it under the buildings policy. Yes, there will be a £5k excess if the ManCo decides to make a claim, but that will either be taken from the block 'sink fund', or from everyone's contribution. That is what 'insurance' is about - it takes the liability away from the insured, and spreads it out.
If the affected flats didn't have their own contents policies to cover internal damage beyond 'fabric', that's a real shame, but their call.
You have sorted your own flat? I presume that's because you didn't have contents insurance?

Albermarle

Even with Home insurance its common for the excess on Escape of Water to increase after prior Escape of Water claims, its generally higher than the other excess anyway but often will go to £1k or more after a couple of claims.

If you examine closely the T's and C's of a couple of the smaller and low price home insurers that often appear at the top of comparison tables, they do not cover escape of water at all. 
That is how I read some of the wording anyway.

LookinForaBargain_2

Thanks for all your feedback, albeit not what I really wanted to hear. :-(

I wasn't negligent in any way. The leak what behind the shower unit in the wall, which was there from when the property was built 15 years ago. 

The managing agent is saying that we are liable for the damage below for some reason. But, if I was them, I'd be mightily piffed off if an apartment above caused damage to my flat and then I was told that the excess was £5k and it was down to me.  

Seems like a major problem because how could you know if the flat above is going to leak?

Unfortunately, it seems like these properties were built to such a poor standard, it means that the insurances are always paying out. When we had the cladding removed they also had to spend hundreds of thousands on replacing the fire escapes because they were made of........ wood. Who signed that off?

It is frustrating to learn that I'm effectively not covered by the buildings insurance. I have spoken to the broker and I understand why it is difficult to cover such a property, but it doesn't soften the blow. 

We're in the process of selling the property because there's no money it rental apartments anymore. At least not these ones. They are now a money pit. 

We had 10 years of very little profit and it has been wiped out by the cladding, increased charges, and this water excess. It's been an absolute waste of eff-ing time. 

user1977

LookinForaBargain_2 said:

I wasn't negligent in any way. The leak what behind the shower unit in the wall, which was there from when the property was built 15 years ago. 

The managing agent is saying that we are liable for the damage below for some reason.

Well, they're wrong, if you weren't negligent, and they're not the judge.

WIAWSNB

LookinForaBargain_2 said:

Thanks for all your feedback, albeit not what I really wanted to hear. :-(

I wasn't negligent in any way. The leak what behind the shower unit in the wall, which was there from when the property was built 15 years ago. 

The managing agent is saying that we are liable for the damage below for some reason. But, if I was them, I'd be mightily piffed off if an apartment above caused damage to my flat and then I was told that the excess was £5k and it was down to me.  

Seems like a major problem because how could you know if the flat above is going to leak?

Unfortunately, it seems like these properties were built to such a poor standard, it means that the insurances are always paying out. When we had the cladding removed they also had to spend hundreds of thousands on replacing the fire escapes because they were made of........ wood. Who signed that off?

It is frustrating to learn that I'm effectively not covered by the buildings insurance. I have spoken to the broker and I understand why it is difficult to cover such a property, but it doesn't soften the blow. 

We're in the process of selling the property because there's no money it rental apartments anymore. At least not these ones. They are now a money pit. 

We had 10 years of very little profit and it has been wiped out by the cladding, increased charges, and this water excess. It's been an absolute waste of eff-ing time. 

Why are you simply accepting what the ManCo are telling you? Have you read the insurance docs? It clearly does include escape of water damage, albeit with a sizeable excess, so what's the problem? This is for them to sort out - they are supposed to be the building 'managers'...
Do you have contents insurance? Does it include Legal Protection? If so, call them up for advice. If you don't have this, make sure you include it next time.
As I understand it, the claim for the damage presented to the ManCo should have included your property too (apart from contents), as well as the other two flats. Suddenly the £5k excess is looking quite reasonable.
Don't complain about how unfair this is, but instead find out if you've read it wrong. And if you have, tell the other two flats what they need to do - get on to the ManCo. This ain't your problem to solve, as you weren't negligent.
You didn't make this happen. 

eddddy

WIAWSNB said:

This is for them to sort out - they are supposed to be the building 'managers'...

No - it's not for the management co to sort out.

The OP is responsible for fixing damage to their own flat (and paying for the repairs).

And the downstairs neighbours are responsible for fixing damage to their flats (and paying for the repairs).


The only time the management co would get involved is if the OP or the neighbours want a building insurance claim initiated. The Management co would need to start the claim process.

WIAWSNB said:

You didn't make this happen. 

And the management co didn't make this happen either.

WIAWSNB

eddddy said:

WIAWSNB said:

This is for them to sort out - they are supposed to be the building 'managers'...

No - it's not for the management co to sort out.

The OP is responsible for fixing damage to their own flat (and paying for the repairs).

And the downstairs neighbours are responsible for fixing damage to their flats (and paying for the repairs).


The only time the management co would get involved is if the OP or the neighbours want a building insurance claim initiated. The Management co would need to start the claim process.

WIAWSNB said:

You didn't make this happen. 

And the management co didn't make this happen either.

How are the owners of the downstairs flats supposed to fix their own flats, if - say - ceilings have come down, walls need replastering, and floors need replacing?

eddddy

WIAWSNB said:

eddddy said:

WIAWSNB said:

This is for them to sort out - they are supposed to be the building 'managers'...

No - it's not for the management co to sort out.

The OP is responsible for fixing damage to their own flat (and paying for the repairs).

And the downstairs neighbours are responsible for fixing damage to their flats (and paying for the repairs).


The only time the management co would get involved is if the OP or the neighbours want a building insurance claim initiated. The Management co would need to start the claim process.

WIAWSNB said:

You didn't make this happen. 

And the management co didn't make this happen either.

How are the owners of the downstairs flats supposed to fix their own flats, if - say - ceilings have come down, walls need replastering, and floors need replacing?

The owners of the downstairs flats hire plasterers, decorators, flooring contractors etc.

That's the kind of thing property owners have to do, when their property is damaged and needs repairing.