Non-resident landlords being refused legal expenses on insurance?
3 years ago | 10 comments
Time for your re-instatement building quote? Read this first!
12:01 AM, 30th March 2023, 3 years ago
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Hello, If it’s time for your re-instatement quote for your block building insurance please learn from our mistake. We have just had our insurance re-instatement done which involved a site visit by the insurance broker.
Our block of 7 flats and 1 commercial unit are in Harrogate town centre, North Yorkshire. Imagine my astonishment when our RTM accounts lead informed me as a Director of the RTM that as a result of the quote, our block had been re-valued as 2.2 million for a re-build moving from the previous figure of £900,000!
Worse still, this revised figure was sent to our insurance broker who then upped our premium by over 100%.
I was so shocked that I immediately contacted a local surveyor in Harrogate and sent him this re-investment quote. He does many similar blocks in Harrogate and is very experienced. He immediately concluded that the figure, in his opinion, was 1 million pounds too high and that the figures quoted being much too high per metre for the re-build.
Naturally, I challenged the insurers but they stand by their figures! We are of course now going to instruct the local surveyor to produce another report which is estimated to be around a value of 1.2 million not 2.2 million!
This will then reduce our insurance premium to an acceptable uplift and not over 100%.
I just wanted to advise everyone to use, where possible, a local surveyor and, if possible, get more quotes as the difference can be huge. We have now paid £540.00 for the first quote and have to get another but at least we will bring down our premiums.
I’m advised that this is now a common thing whereby re-instatement quotes are done at the higher quartile per metre as insurers are getting windy re re-build costs.
The irony I find is that insurance is about risk and likelihood but what are the chances of any of our blocks being reduced to a complete re-build?
I bet about 100,000 at least to 1 but this never stops the greed of some and at our, the leaseholders, expense. Unfortunately we all have to have them done but be very careful who you choose!
Thank you,
Terry
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Landlord insurance for flats?
3 years ago | 10 comments
Rebuild costs for Landlords Insurance are now higher than market value?
3 years ago | 17 comments
Member Since January 2015 - Comments: 1447 - Articles: 1
11:37 AM, 30th March 2023, About 3 years ago
Shop around for reinstatement valuations and building insured values surveyor fees.
I recently have been quoted from £500 plus VAT to £1250 plus VAT
Member Since April 2021 - Comments: 189
12:31 PM, 30th March 2023, About 3 years ago
Why was the first visit done by an insurance broker? Is that what you meant?
Member Since August 2015 - Comments: 40
1:24 PM, 30th March 2023, About 3 years ago
A friend of mine has just built a block of eight flats at a cost of around £1.3m not including land and demolition and site clearance. Be careful about underinsuring.
Member Since January 2020 - Comments: 559
3:34 PM, 30th March 2023, About 3 years ago
It is a great suggestion to get a reinstatement value done by a qualified building surveyor. As a managing agent with some blocks, it is something that we outsource ourselves (despite being chratered surveyors).
I have never found that increasing the reinstatement value has a massive effect on premiums. Premiums are derived from risk; post Grenfell premiums have risen significantly, even for smaller blocks and those without cladding – insurers just don’t seem to like them.
Although I’d take it as read that the surveyor in the post was given all the information, remember that build costs are only part of the value – you need to include allowance for partial rebuild (which can be expensive), demolition, fees, VAT, etc.
There are no prizes for underinsuring and it can be a problem if you need to make a claim.
Member Since January 2020 - Comments: 1102 - Articles: 1
1:06 AM, 31st March 2023, About 3 years ago
Insurers are usually careful to make it clear that it is the policy holder’s responsibility to ensure that the sums insured are adequate, so it is rather surprising that brokers and/or insurers have actually recommended what the sum insured should be. Commercial insurances are normally subject to average which means that if at the time of a claim the sum insured is below the cost of rebuilding, the amount payable will be reduced in proportion to the under insurance. The likelihood of the property having to be completely rebuilt is therefore irrelevant.
Trying to save money by insuring for less than recommended could prove very costly in the event of a claim.
Member Since May 2017 - Comments: 765
12:05 PM, 31st March 2023, About 3 years ago
It seems some re-build costs are now higher than the sum of the value of the flats – even though the plot remains.
Member Since January 2020 - Comments: 1102 - Articles: 1
12:46 PM, 31st March 2023, About 3 years ago
Reply to the comment left by JB at 31/03/2023 – 12:05That has always been a possibility and reflects the fact that the cost of building materials and labour has no direct link to market value.
Member Since January 2017 - Comments: 4
8:47 AM, 1st April 2023, About 3 years ago
Reply to the comment left by Crossed_Swords at 30/03/2023 – 12:31
Yes it is a mistake when it has been edited for input. It was a surveying company from Warwickshire – BCH who originally came out and their surveyor did the original report which has moved from £900,000 to 2.2 million!