Buildings insurance for large block of flats

[Blue Oval84]

In need of some advice if I may...

I live in a 60's block of flats, the development is formed of two main buildings, housing a total of about 50 properties. It's mainly concrete and brick built, not a special type of construction like flat panel, I was able to get a mortgage no problem.

The insurance claims history isn't great, apparently there have been 9 claims in the past three years, totaling approx £15K in payouts. Mainly for escape of water from internal pipes.

This is my first year of ownership, and the buildings insurance has come in at £612 for my flat, with a total premium for the block of £33k.

The policy is with a big insurer, and covers £20 million for the building, with a declared value of just over £13 million(not sure why this is different from the building amount?), and a Property Owners Liability of £10 million.

Can anyone confirm whether £33K seems like a reasonable insurance premium?

A friend of mine is on a committee for a similar block and he thought that premium was excessive.

I've asked the managing agents for evidence of what other quotes they received as part of the process but am still awaiting a reply.

If it genuinely is reasonable then fair enough, but considering how high the premium is, I'd have thought there were better deals out there, even taking into account the claim history?

Thanks!

[tomsugden]

The management company for a property I used to own, had a sister company that did insurance. They would automatically channel insurance through them at what turned out to be an inflated price. When I questioned this and asked them to go to the open market, suddenly the premium dropped by about 70%.

Ask the management company for details of the cover, and do your own research.

[Nollub]

Sounds like way too much to me. When I looked after the finances of the management company where I used to live there were 25 flats and the annual premium was around £4k despite some claims for flooding three years earlier.

[ralphrj]

tomsugden said:

The management company for a property I used to own, had a sister company that did insurance. They would automatically channel insurance through them at what turned out to be an inflated price. When I questioned this and asked them to go to the open market, suddenly the premium dropped by about 70%.

Ask the management company for details of the cover, and do your own research.

I came across something similar when I worked in insurance.

The owners of the property management company also owned a second company that acted as an introducer to the insurance company. The insurance company would invoice the property management company the insurance premium at full price whilst at the same time making a payaway to the second company for the introduction.

[Steve H]

Feel free to PM me as this is what I do

[Blue Oval84]

Thanks Steve, PM sent!

[Steve H]

Blue Oval

Just sent you 2 emails.

Regards

Steve H

[elanfan]

I'm no longer up to date on rates as I've retired but if you add the premiums up over those 9 years and divide by the claims figure they have a very low loss ratio I.e. They are making a huge profit. Which is the game they are in. You certainly need to challenge the premium. Have you a tenants committee that could take this up?

[dacouch]

elanfan said:

I'm no longer up to date on rates as I've retired but if you add the premiums up over those 9 years and divide by the claims figure they have a very low loss ratio I.e. They are making a huge profit. Which is the game they are in. You certainly need to challenge the premium. Have you a tenants committee that could take this up?

It's nine claims in the last three years running at about 17% is not that low a claims ratio.

If you're going back nine years there are likely to be a lot more claims

[Blue Oval84]

dacouch said:

It's nine claims in the last three years running at about 17% is not that low a claims ratio.

If you're going back nine years there are likely to be a lot more claims

There are dozens more claims going back beyond three years, as you say, over the last three years alone we are on 9 claims, nearly all for water leaks, and mostly low value stuff (hence total payout is only £15K).