Insuring 2 flats without breaking the bank

Elspeth_Varley

Last year my leaseholder upstairs and I as freeholder of the building and resident downstairs paid £760 with CIA for Buildings Ins for both 1 bed flats. This included approx £20,000 cover for household ins for each property. The building had been a 3 bed terrace house, mid 1800s build before conversion 11 years ago. Is it realistic to hope to get similar cover cheaper anywhere else? It just seems a lot of money. Can anyone suggest an alternative insurance company. Thanks.

subjecttocontract

In the past one of my freeholders use to keep premiums low by accepting larger excesses but, you need to see what is permitted within the leases.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6683726/insuring-2-flats-without-breaking-the-bank

Are you buying a Block insurance policy or something else? In most cases you would need block insurance as home insurance traditionally only covers a single dwelling, the problem with this is that its a form of commercial property insurance and as such tends not to be as keenly priced as consumer insurance - businesses typically actually care about the quality of cover not just the price.

What do the leases actually state about who's responsible for what? Normally the freeholder is responsible for buying the buildings insurance (and any contents for shared stuff) then each leaseholder is responsible for buying their own contents insurance for their own stuff.

There are a couple of specialist block MGAs/Brokers who focus on small developments and conversion properties, no guarantee they will be cheaper but no harm in trying

poseidon1

CIA seems to be a broker that specialises in providing landlord cover in the buy to let investment sector. Is one of the flats let by any chance?

I live in a large 4 storey converted victorian London town house comprising 3 x 2 bed and a 1 bed flat and have been responsible for arranging cover since 2008 when we all bought out the Freeholder using a freehold company.

I recall in the 1st year cover cost around £1,300 for £1.2 million rebuilding from a specialist block of flats broker.

Over the years I have had to chop and change brokers and insurers as premium quotes rose as high as £2,500, as rebuilding costs escalated.

We are now settled with a brokerage called London Flats Insurance (a sub brand of Residents Line Flats Ltd in Wolverhampton) where our premiums haved settled at around £1,750 annually over the last 4 years partially helped by pushing up our excess for small claims to £500 ( originally started at £100). Rebuilding cover now sits at over £2 million .

You simply have to shop around around with the specialised block of flats brokers as I have had to do, to find the most competitive quotes for your little block.

You state you both are joint freeholders so it is clearly a joint responsibility between the two of you to shop around. In my case, I took on the responsibility on behalf of our freehold company ( because no one else could be bothered ) and have been stuck with the task ever since.

I also deal with our annual Companies House compliance to ensure our Freehold company does not get struck off for non compliance.

As you are discovering, certain responsibilities come with being a freeholder of a small block of flats if you want to mitigate your running costs.

Smithcom

https://forums.moneysavingexpert.com/discussion/6683726/insuring-2-flats-without-breaking-the-bank

It would be unusual for a Flats policy (which is likely what you will need) to include household contents insurance, so I am doubtful that you have the correct product.

I would recommend having a rebuild cost assessment undertaken, so that you know the correct level of buildings cover needed.

Policy would normally be solely in the freeholder's name, and should provide Public Liability and sometimes Employers Liability. Does the insurer know the full Freeholder/Leaseholder arrangements, or is it a policy simply bought online??

I would recommend discussing your arrangements with a broker, in order that you can satisy yourself that:

1. You have already bought the correct product
2. Your quotation is competitive

Please be mindful that this type of insurance is a commercial policy, and you will need to disclose material information regarding each policyholder. I only mention this because you need to have your leaseholder as a joint policyholder currently. You need to be careful regarding disclosures, such a convictions, CCJs, criminal convictions, bankrupcies, etc etc

I hope that you get this sorted

All the best

SC

shunsumaker

https://forums.moneysavingexpert.com/discussion/6683726/insuring-2-flats-without-breaking-the-bank

As for the £760, I’d first be curious to know where that figure actually comes from. In any case, the £20,000 worth of home contents cover per flat is what’s got me thinking.

If there really are two separate households living there, I’d wonder why the building and contents cover have to be combined. It might make sense to combine the building cover. But with the contents cover, I’m not so sure.

I’d certainly have a look at a few other quotes. But I’d make absolutely sure that the same details are specified across the board. £600 does sound better at first, of course. But if it later turns out there’s a higher excess somewhere or something isn’t covered, that quickly puts things into perspective.

I’d dig out the lease again beforehand. Perhaps the building insurance is already specified in there anyway. Then there’s no need to spend ages thinking about some of the options. After that, you can still see what an estate agent says who deals with converted houses like this more often.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82143956#Comment_82143956

The OP may or may not choose to revisit their query here, but from what I ascertained CIA provide package policies to Buy to Let landlords, so I strongly suspect that is the reason for the inclusion of contents insurance which is not a normal feature of standard block of flats buildings cover,

Certainly in the case of all the policies I bought over the many years, the only aspect of contents cover would be for freeholder's equipment/furnishings in the common areas ( fire extinguishers, alarms, fitting carpets, lifts, air con etc) none which are likely a feature of smaller house conversions, and certainly did not apply in our case.

Our policy certainly does not have individual contents cover, that is each leaseholders personal responsibility, so the OP may well have an inappropriate policy that suits the requirements of the buy to let co freeholder, but not those of the owner occupier OP.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82144052#Comment_82144052

Landlords insurance can include contents insurance given you can rent a fully furnished flat where the tenant litterally just brings their clothes and food with the landlord providing everything else.

Block insurance can also cover communal contents, life in a friends block they have a lobby with sofas and a cinema fully kitted out with speakers, screens, projector, chairs etc. I've not seen one that covers the contents of the individual units and Landlord policies only cover a single dwelling rather than a multi-dwelling building

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82144553#Comment_82144553

Which is what I said with with regard to block insurance, ie it has specific cover for freeholder's equipment and contents in the communal area. Our block policy has this as a no cost add on, its just that we have nothing fitting that description within our flat house conversion.

We do not and never have had a block policy that purported to address the contents of our individual flats, although one of the leaseholders does rent out a furnished flat in the building and has his own standalone and unrelated landlord's content insurance for that unit.

In any the event the OP has not logged on since making their intial post, so at this point we seem to have been only talking amongst ourselves.

shunsumaker

Then my gut feeling about the £20,000 contents cover wasn't so wrong after all. I just can't understand why the contents of both flats are included in this policy. After all, with leasehold flats, each resident would normally insure their own belongings. Buildings insurance is another matter entirely and runs through the freeholder.

Before comparing prices, I’d therefore like to clarify exactly what is meant by these £20,000. Otherwise, a quote may look cheaper at first, but somewhere in the small print, that part may be missing. Perhaps a portion of the £760 is included in that too.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82153161#Comment_82153161

Who are you addressing your comment?

There is no evidence the OP has seen any of the comments after logging in for the first and only time on the 17 September. Doesn't seem to have been a particularly important enough query to them to warrant returning to the forum.