Are freeholders obliged to insure against escape of water?

by Readers Question

20:42 PM, 30th October 2013
About 5 years ago

Are freeholders obliged to insure against escape of water?

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Are freeholders obliged to insure against escape of water?

I am a leaseholder in a large block of flats built in 2007.

After two flats were severely damaged by water escaping through pipes our insurance had the excess for escape of water increased to £20,000. Year by year this was reduced to £12,000. However, last year the insurance company said this was an error and they would not include escape of water in our policy. Hence we now do not have any cover for escape of water.

My questions are: Are freeholders obliged to insure against escape of water

  1. Does the freeholder have to provide such cover?
  2. Can insurance companies opt out like this or is it like subsidence that the existing company has to cover you?
  3. Is this a usual scenario? That is do blocks of flats often not have such cover?

Any advice or help would be most gratefully received.

I should mention that this escape of water was due to poor building by the developers and not the usual flooded bathroom. Hence the insurers probably consider the building as a whole a risk.



Comments

Mark Alexander

20:46 PM, 30th October 2013
About 5 years ago

Were the properties sold with the benefit of an NHBC certificate?
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Mike W

23:13 PM, 30th October 2013
About 5 years ago

Q1. I guess best endeavors - but I suspect the insurance company has experience on this 'problem'.
Q2. I guess its a commercial decision? Would you provide insurance to the Titanic on its maiden voyage given what you know?
Q3. My personal experience of a particular event - collateral damage to my flat from neighboring flat in modern block - constructed 2008: in excess of £60,000. Talking to the loss adjuster and my managing surveyor is that the incidence of damaging leaks from central heating and water pipes in modern blocks is quite high. They stated insurance companies may refuse to insure unless water systems are pressure tested... and of course the tests may result in a problem ...

Perhaps discuss with other insurers and in particular ask what can be done to minimize the risk ...

Sorry probably not what you wanted to hear.

Steven Way

7:49 AM, 31st October 2013
About 5 years ago

The start here would be to see what the lease says as regards the scope of the freeholders insuring obligations.

As far as the insurers response about a mistake is concerned that will be something for an insurance specialist to advise upon.

My experience as a surveyor of dealing with water leakage in flats is that more often than not it occurs shortly after construction or shortly after installation / alteration.

We have found particular issues with plastic pipes and their joints although this has got much better.

We have also had several cases where bathroom and kitchen "fitters" simply haven't done the job properly or in the case of a £25,000 claim we're just dealing with simply didn't isolate the cold water main service and tied to install a kitchen in an upper flat with it live!

Beware if an upstairs neighbour is doing work their kitchen or bathroom.

Annette Stone

22:57 PM, 31st October 2013
About 5 years ago

Almost every lease I have seen in the last 23 years sets out either in detail or as a group the list of things a freeholder must insure against and escape of water is one of them

You say the block was built in 2007 and it may be, as we have experienced twice in recent years with modern, very stylish buildings that the design of the roof and the guttering and down piping was simply inadequate to cope with winter rain. This is a huge problem because the NHBC guarantees do not cover design failures and the costs of trying to remedy this fall to the lessees. You need a very brave surveyor to try and sort out a solution

If the problem is an internal one and insurers are simply saying that there are too many, too expensive water damage claims they can set a very high excess of say £20,000 in a big block and basically any claim up to sum is not covered. What happens in practice is that the freeholders have no choice but to accept this if alternative insurance cannot be found but they then have to insure the excess so that lessees are not funding every claim up to this amount. The insurance of the excess is usually valid for only two or three claims in the year and after that either the service charges or individual lessees end up having to pay depending on differing circumstances

What we, as a management company did when we had this was to bring in a very good builder who checked out every single joint, pipe and waste as well as the roof and down pipes to minimize risk and this did reduce the claims considerably. If the two leaks the questioner had were on the same side or area of the block that might indicate a localized problem. If your building has a caretaker he should be very aware when work is done in flats and he should always carry out an inspection and see if everything is watertight

Finally, where are the managing agents in all of this?

Vanessa Warwick

10:58 AM, 1st November 2013
About 5 years ago

With regards to water leaks in properties, I recently came across an innovative device called "FloodCheck" that stops this happening. It also stops excessive usage of water in a property, so good when landlord is paying the utility bills, such as in an HMO.

http://www.propertytribes.com/floodcheck-innovative-award-winning-product-for-protection-property-t-8328.html

Helen Paintin

10:32 AM, 4th November 2013
About 5 years ago

As a retired insurance broker, I would suggest that the installation of "Flood Check" as suggested above is a very good idea. You could also approach an independent insurance broker and advise them that you are thinking about this preventive measure and they will approach a wide range of insurers on your behalf and should be able to get you a variety of quotes. I feel sure that with just 2 claims and the proposed Flood check installed that you will get a positive response. **Details of broker recommended by poster moderated out**
Hope this helps.


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