Buildings insurer refusing to allow my son to switch because of an open claim.

Black_Monk

Dear All

My son lives in a Victorian terraced house which Has been divided into two self-contained flats.  He owns the downstairs flat the upstairs flat is owned by a landlord who has installed tenants.  Some time ago the upstairs washing machine leaked.  The landlord would not call a plumber so my son had to do it.  The leak damaged the upstairs floor and a claim to the buildings insurer (Simply Business) was made.  The property is covered by a joint insurance policy.  My son has received a greatly increased insurance premium because of this.  Simply Business has said he is unable to switch insurer because there is an open claim, is this legal?

Kind regards

Black_Monk

Nearlyold

Is the claim still open or has the work been completed?   Are Simply Business saying that they can't find a different insurer to quote due to the open claim or that the current insurer (presumably the insurer that's paying for the repairs) won't let your son change insurers.?

MyRealNameToo

Black_Monk said:

Dear All

My son lives in a Victorian terraced house which Has been divided into two self-contained flats.  He owns the downstairs flat the upstairs flat is owned by a landlord who has installed tenants.  Some time ago the upstairs washing machine leaked.  The landlord would not call a plumber so my son had to do it.  The leak damaged the upstairs floor and a claim to the buildings insurer (Simply Business) was made.  The property is covered by a joint insurance policy.  My son has received a greatly increased insurance premium because of this.  Simply Business has said he is unable to switch insurer because there is an open claim, is this legal?

Its not that he can't switch its that other insurers arent interested in taking on the risk whilst there is an open claim. Its not uncommon in Home insurance if its a substantial claim but its not clear if he has bought LandLords insurance or Block insurance and can't say I've had experience of dealing with renewals via these products. 

Has he spoken to another broker to see if they can get quotes? 

Home/ Landlords/ Block insurance is a short term product (12 months normally), no insure is legally obliged to provide a quote and there are several scenarios that will make getting a quote difficult (eg unspent conviction for fraud). As long as they arent declining because of a protected characteristic (sex, religion, race) they are free to decline anyone for any reason. 

eddddy

Assuming you are in England or Wales (and not Scotland)...

Your son's options for insuring will depend a lot on these types of factors:

Presumably your son is the leaseholder of the downstairs flat - and "the landlord" you mention is the leaseholder of the upstairs flat.

• Who is the freeholder of the building? (Is it a third party freeholder, or are the leaseholders also joint freeholders - i.e. what estate agents call "share of freehold"?)

• What does your son's lease say about buildings insurance? Is the freeholder responsible for insuring the whole building (most likely)? Or is each leaseholder responsible for insuring their part of the building (less likely)? Or something else?

Black_Monk

Thank you for your responses guys.

Does my son need joint insurance or can he just insure his downstairs flat?

user1977

Black_Monk said:

Does my son need joint insurance or can he just insure his downstairs flat?

You first need to answer eddddy's questions.

huckster

Generally you don't Insure flats within the same building as a separate risk. This is due to the nature of the risk. 

For example, If one flat within block was not Insured or severely under insured, if the whole property was subject to a total loss event such as a fire, this would cause massive issues. There might not be enough funds from Insurances to rebuild the property and there would probably be legal headaches to resolve.

If every flat is insured separately, how could individual flat owners trust others within same block to have also insured their own flats, given the shared risks.

MyRealNameToo

huckster said:

Generally you don't Insure flats within the same building as a separate risk. This is due to the nature of the risk. 

For example, If one flat within block was not Insured or severely under insured, if the whole property was subject to a total loss event such as a fire, this would cause massive issues. There might not be enough funds from Insurances to rebuild the property and there would probably be legal headaches to resolve.

If every flat is insured separately, how could individual flat owners trust others within same block to have also insured their own flats, given the shared risks.

I agree in principle but then you can also look at Scotland where there virtually is no leasehold concept and traditionally people did insure their own flat and their share of the common spaces. It does cause problems and there seems to be a trend to moving to factoring companies buying block insurance. 

You can buy an indemnity policy which will cover the issue where one of your neighbours who your claim is dependent on failing to buy appropriate insurance. You are however still looking at a slower process.