Buildings insurance for house split into flats (share of freehold)

tg99

Hi,

We have a Victorian house split into several flats each with a share of freehold. The buildings insurance covers the whole building and the policy is in the name of the freehold company. Can anyone with a similar set up advise on who they’ve managed to get the cheapest prices for buildings insurance from? And are there any insurers who will provide direct quotes (as per standard residential insurance) rather than needing to go through a broker given the policy is in the name of a company and for a whole building split into flats? 

The standard residential buildings insurers I’ve contacted have said that given that the insured is a company and covering multiple flats in one building then they cannot insure it and we’d need a commercial property policy for blocks of flats or go poss via a Landlord insurer.

Thanks

MyRealNameToo

tg99 said:

We have a Victorian house split into several flats each with a share of freehold. The buildings insurance covers the whole building and the policy is in the name of the freehold company. Can anyone with a similar set up advise on who they’ve managed to get the cheapest prices for buildings insurance from? And are there any insurers who will provide direct quotes (as per standard residential insurance) rather than needing to go through a broker given the policy is in the name of a company and for a whole building split into flats? 

The standard residential buildings insurers I’ve contacted have said that given that the insured is a company and covering multiple flats in one building then they cannot insure it and we’d need a commercial property policy for blocks of flats or go poss via a Landlord insurer.

What does your lease state about who's responsible for the insurance? 
How many units are there and are you all share of freehold? 

The normal setup is that it's the freeholder that has to buy the insurance and as such its Block (of flats) Insurance that it needs to buy. 

Were the leases changed to make the leaseholders responsible for insurance then you could each individually buy home insurance for your units but that leaves you exposed to damages that impact the common areas, much longer claims for damage to roof or foundations and the big risk that your neighbour fails to buy insurance (or invalidates their insurance) and you are left in an unrepairable property because they can't afford to repair their part of the property. Eg your top floor, their bottom floor, they have a significant fire causing major damage to their unit and moderate damage to yours. Your insurer won't fix the damage to your until until the structural damage to the supporting walls below are fixed and they dont have insurance and can't afford to fix them themselves. 

tg99

Yes all share of freehold and freehold company in which we each share responsible for insuring whole building. Hence we currently have block of flats policy. Hence wondering anyone in similar situation who they’ve got the cheapest quote with, whether managed to get quotes direct from insurers or needed to go via a broker etc. 

MyRealNameToo

tg99 said:

Yes all share of freehold and freehold company in which we each share responsible for insuring whole building. Hence we currently have block of flats policy. Hence wondering anyone in similar situation who they’ve got the cheapest quote with, whether managed to get quotes direct from insurers or needed to go via a broker etc. 

Commercial property insurance is almost exclusively via brokers and other intermediaries. There are some specialists claiming to be targeting small conversion type setups rather than blocks of 300+ units but if they are actually any cheaper or such I can't tell you. 

tg99

MyRealNameToo said:

tg99 said:

Yes all share of freehold and freehold company in which we each share responsible for insuring whole building. Hence we currently have block of flats policy. Hence wondering anyone in similar situation who they’ve got the cheapest quote with, whether managed to get quotes direct from insurers or needed to go via a broker etc. 

Commercial property insurance is almost exclusively via brokers and other intermediaries. There are some specialists claiming to be targeting small conversion type setups rather than blocks of 300+ units but if they are actually any cheaper or such I can't tell you. 

Yes that’s been my experience too in previous years. Do you have the names for any of these specialists as I might give them a try since we only have a few flats in our conversion.

poseidon1

tg99 said:

MyRealNameToo said:

tg99 said:

Yes all share of freehold and freehold company in which we each share responsible for insuring whole building. Hence we currently have block of flats policy. Hence wondering anyone in similar situation who they’ve got the cheapest quote with, whether managed to get quotes direct from insurers or needed to go via a broker etc. 

Commercial property insurance is almost exclusively via brokers and other intermediaries. There are some specialists claiming to be targeting small conversion type setups rather than blocks of 300+ units but if they are actually any cheaper or such I can't tell you. 

Yes that’s been my experience too in previous years. Do you have the names for any of these specialists as I might give them a try since we only have a few flats in our conversion.

I have exactly the same set up as you, and have been organising buildings cover since 2008.

I can confirm only specialist brokers were able to assist. Waste of time approaching residential home insurers. Over the years I have had to chop and change brokers as the panel of insurers they used became uncompetitive.

There has been significant convergence and amalgamation in the brokerage business with smaller firms absorbed by larger entities. Mercers and Howdens have been especially busy mopping up the competition, and American owned parent companies are beginning to dominate this space to the detriment of UK policy holders.

We are currently insured via  London Flats Insurance brokerage ( part of Residentsline Ltd),  who were until recently an independently owned brokerage using Lloyds underwriters. However even Residentsline has fallen victim to takeover activity and now owned by the PIB Group who in turn owned by private equity and hedge funds. 

Our last premium was £1780 for £2.4 million rebuilding costs, £500 excess and loss of rental income cover ( one of the 4 flats is rented). Brit Syndicate is the insurance company,  the likes of RSA and Allianz were in the region of £2700-£3500 for the same cover.

Remains to be seen if  London Flats will  continue to be competitive under new ownership.

 As you are no doubt finding, having to hunt for competitive cover can be quite tedious. It represents the most time consuming  part of running the freehold company.

MyRealNameToo

Residentsline Limited is technically a cover holder not a broker in relation to Lloyds, it could be that they are a broker but include themselves on their own panel so place the policy with another insurer if they are offering better terms or themselves if they can beat them. They arent licensed by Lloyds as a broker so would only be able to use the delegated underwriting authority from their binding agreement and not approach other syndicates in Lloyds. 

Thats fine though, most syndicates are really looking at 5 figure premiums minimum on open market risks but binders allows coverholders write much smaller policies at a more reasonable price. 

tg99

poseidon1 said:

tg99 said:

MyRealNameToo said:

tg99 said:

Yes all share of freehold and freehold company in which we each share responsible for insuring whole building. Hence we currently have block of flats policy. Hence wondering anyone in similar situation who they’ve got the cheapest quote with, whether managed to get quotes direct from insurers or needed to go via a broker etc. 

Commercial property insurance is almost exclusively via brokers and other intermediaries. There are some specialists claiming to be targeting small conversion type setups rather than blocks of 300+ units but if they are actually any cheaper or such I can't tell you. 

Yes that’s been my experience too in previous years. Do you have the names for any of these specialists as I might give them a try since we only have a few flats in our conversion.

I have exactly the same set up as you, and have been organising buildings cover since 2008.

I can confirm only specialist brokers were able to assist. Waste of time approaching residential home insurers. Over the years I have had to chop and change brokers as the panel of insurers they used became uncompetitive.

There has been significant convergence and amalgamation in the brokerage business with smaller firms absorbed by larger entities. Mercers and Howdens have been especially busy mopping up the competition, and American owned parent companies are beginning to dominate this space to the detriment of UK policy holders.

We are currently insured via  London Flats Insurance brokerage ( part of Residentsline Ltd),  who were until recently an independently owned brokerage using Lloyds underwriters. However even Residentsline has fallen victim to takeover activity and now owned by the PIB Group who in turn owned by private equity and hedge funds. 

Our last premium was £1780 for £2.4 million rebuilding costs, £500 excess and loss of rental income cover ( one of the 4 flats is rented). Brit Syndicate is the insurance company,  the likes of RSA and Allianz were in the region of £2700-£3500 for the same cover.

Remains to be seen if  London Flats will  continue to be competitive under new ownership.

 As you are no doubt finding, having to hunt for competitive cover can be quite tedious. It represents the most time consuming  part of running the freehold company.

Very useful, thanks.