Buildings Insurance for Blocks of Flats
Posted: March 31st, 2009 | Author: George | Filed under: Home Insurance | Tags: blocks of flats insurance, multiple occupancy insurancePEOPLE living in blocks of flats or houses converted into more than one residential unit could have been mis-sold buildings insurance, according to a recent report which has found many flat owners are dual insured and suspects many policyholders could have been misled.
Dual insurance occurs when a policy holder is paying for two types of cover when they only need one and can also apply if they have been sold buildings cover for their individual flat or maisonette. The reason this mostly affects flat owners is although blocks of residences can be classed as a single unit and can be covered with just one policy, some insurers still offer individual policies for each individual flat.
Typically the freeholder will have a policy covering the whole building and this is usually included in the service charge, tough you should always check this out. As many as 10 per cent of the population could be affected.
One Broker explains : “I have been seeing clients with dual cover for around 10 years but up until recently it was only about one case per annum. A client who lived in a block of twelve flats came to me once and each unit had separate buildings insurance cover. Also when the client’s wife was in the process of remortgaging she was persuaded to take cover, when she unknowligly already had it.
Problems are also arising when a lender knows a building is insured - this will have been clarified before a mortgage was finalised - but still offers a borrower building insurance. The crux is they are trying to take money when they don’t have to.
Multiple separate policy holders may be paying between £200 and £300 a year but a freeholder’s policy for the whole building may be proportionally half this amount. If the freeholder has not taken out an individual policy to cover the housing block, the first step is to approach them to see if this can be arranged. Failing that, residents could club together and form their own residents’ association and take out a collective poliy. Form a limited company to do this is not necessary (paperwork every time someone joins or leaves), becoming a resdients’ association will suffice and is much cheaper.
A key reason residents who do not club together is that they encounter problems because insurance companies often only recognise a single name for the policyholder, a problem shared by unmarried couples too. Nowadays more and more insurers will offer cover to collective residents associations, even if such insurance now falls under the “commercial” banner.
One specialist insurance broker who may be able to help is Adrian Flux, call 0800 089 0184.
