Inflated Building Insurance by Freeholder

Inflated Building Insurance by Freeholder

9:53 AM, 28th November 2014, About 9 years ago 8

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I currently have some two bed flats in a block where the freehold has recently been Inflated Building Insurance by Freeholder

I recently got an insurance bill from them that contains the following items:
Annual Ground Rent: £250 (Standard)
Annual Building Insurance: £212.82 (Seems a bit expensive. I have a 3br house nearby insured for £130).
Insurance Admin Fee: £20

I’ve looked a bit online and I can see some articles about 50% commissions being paid back to the freeholder from the insurance company (see THIS ARTICLE in the Independent newspaper)

If they are getting a large commission does anyone have any experience about asking for this to be factored into the insurance premium?

Also the insurance admin fee is new to me.

Are they allowed to do this?

Do I have to pay it?



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Mark Alexander - Founder of Property118

9:54 AM, 28th November 2014, About 9 years ago

I have asked Annette Stone to comment.

Joe Bloggs

17:27 PM, 28th November 2014, About 9 years ago

hi matt,
surely your question should be what can be done about this.
get a quote from another insurer such as towergate on same terms. if you are being overcharged, go to residential property tribunal.

Mike W

20:34 PM, 28th November 2014, About 9 years ago

The leasehold advisory service is a good place to start. Also read the lease. Are there any relevant clauses. Finally I am not surprised that a flat in a block (purpose built) has a higher premium than a house having had a chat with a loss adjuster recently who revealed that insurance companies were concerned about the rising cost of flood damage (escape of water) in blocks. My daughter had a £70000 claim resulting from a leak in a neighbouring flat.

Shakeel Ahmad

21:45 PM, 28th November 2014, About 9 years ago

To get a comparable quote will not be possible without the cooperation of the Freeholder (F/H). This will not be provided for obvious reasons.

In addition a freeholder may have your property covered as part of a portfolio covered, you will also need to know the claim history etc.

Going to LVT/lower tribunal is a waste of time as they not fit for the purpose. They will place the onus on you to say why do you think the premium is high & what you reckon should be reasonable.

I took my F/H to the tribunal and had provided as much as a like for like policy cover as I could due to lack of cooperation from the F/H . This cover was cheaper and despite that it obtained four years later.

The F/H lawyers argued that the quote/cover was not the same as my one did not have a terrorism cover & theirs did.

In my case my premium went up by nearly 45% once the F/H took over the insurance hence my request for information. This information must be provided by the Housing/tenants Act.

When, I requested the F/H to provide me with a breakdown/quotes obtained etc from the brokers they consistently ignored it and when pressed they claimed that they had enclosed it with previous correspondence/and or forwarded me documents that had no relevance. In one letter F/H had confirmed to me that they do not earn any commission. This letter along my other seventeen letters for request/quotes were submitted to the LVT. They just ignored it.

The submissions provided to the LVT by the F/Holders admitted that they had charged 10% commission. LVT ignored this completely. I had also asked the LVT to obtain the insurance quotes in order that it can been seen what if any commission was made. The F/H did not provide this nor did the LVT insisted on this considering the back bone of my application to them was to establish the commission earned.

Conveniently the tribunal hearing is not recorded where as a hearings at the county Courts are.

Joe Bloggs

23:10 PM, 28th November 2014, About 9 years ago

Reply to the comment left by "shakeel ahmad" at "28/11/2014 - 21:45":

you could request the claims history and then go through the complaints procedure to ombudsman/adjudication if not disclosed.

i had a good result at what was the LVT. but i do agree some of their reasoning was a bit odd. you should appeal to the lands tribunal who are a bit more professional.

as terrorism insurance is expensive i can see that that is a significant difference in cover. however if you got a breakdown of the premium charged so that you could exclude the terrorism, that surely would have got round that problem.

Shakeel Ahmad

21:04 PM, 29th November 2014, About 9 years ago

Thanks. Which Ombudsman are we talking about and will they look at the position after the finding by the LVT ?

The above question applies to the land tribunal as well as they are very protective of their remit and the question of jurisdiction will be a issue. In addition I believe there is the issue of cost. I will happy to stand corrected.

Joe Bloggs

9:23 AM, 30th November 2014, About 9 years ago

Reply to the comment left by "shakeel ahmad" at "29/11/2014 - 21:04":

heres details of the new redress scheme:
this course of action should elicit the info needed.

you will need to apply for leave to appeal to the lands tribunal or if it is refused start the process again armed with better info yielded from the complaints procedure.

Matthew Earle

10:37 AM, 2nd December 2014, About 9 years ago

Thanks for your help guys.

What were your thoughts also on the £20 admin fee per flat levied by the freeholder for organising the insurance?

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