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Insurance

Please be advised that there are many factors which contribute towards the costs of the premium, including but not limited to; location of the property, buildings declared value, size, property structure, claims experience and loss ratios.

It should be noted that index linking is applied annually (where applicable) in accordance with the indices supplied by BCIS (Building Cost Information Service), the trading arm of RICS (Royal Institution of Chartered Surveyors), in line with construction industry inflation.

Insurers tend to take into consideration any claims which have occurred within the last three to five years when calculating renewal terms. 

We can confirm that the insurance arrangements are reviewed annually prior to renewal to ensure that the insurance offering is fit for purpose, responsive and reasonably priced.  In addition to the annual review we regularly undertake remarketing exercises. 

Please be advised that Reinstatement Cost Assessments (RCA) are vital to ensure that adequate insurance cover is in place.  They are required to determine the Building Declared value which is the cost of rebuilding the property in the event of a total loss.  Insurers generally recommend that these surveys are carried out every three to five years to ensure the property remains properly insured. 

Please be assured that our client is committed to sourcing competitive premiums and it is not our intention for our Homeowners to pay inflated premiums.  As a matter of course we shall be reviewing terms again prior to the next renewal to ensure the offering remains competitive and fit for purpose. 

An insurance claim is a formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. The insurance company validates the claim and once approved, issues payment to the insured or an approved interested party on behalf of the insured.

We have a dedicated claims team at Gallaghers who handle all the claims and you can contact them to make a claim on the following numbers:

Normal working hours 9am-5pm - 01243 793 729 or 01243 793 769

Out of hours - 0845 300 2055

Please be advised that Reinstatement Cost Assessments (RCA) are vital to ensure that adequate insurance cover is in place.  They are required to determine the Declared Value (DV) which is the cost of rebuilding the property in the event of a total loss.  Insurers generally recommend that these surveys are carried out every three to five years to ensure the property remains properly insured, and we tend to ask that these are carried out every 4 years.

In regard to newly built properties, in our experience we find that Developers tend to under insure these properties as it is cheaper to rebuild so reinstatement cost assessments are recommended to confirm the declared value is correct on these properties and are vital in ensuring the relevant cover is provided.

Please note that the ultimate responsibility to make sure the properties are insured in a sum equal to the full rebuilding cost lies with the party responsible for keeping the property insured as per the terms of the lease and as such they would be responsible for any under insurance.

We would strongly suggest a reinstatement cost assessment is carried out as soon as possible to make sure the properties are insured correctly.

We use a panel of independent surveyors who will carry out these assessments and provide their recommendations on what the declared value should be set at.

Terrorism insurance is a mandatory requirement of the freeholder/head lessor/management company and is a normal insurance that is put in place to cover your property.

The ever increasing investor and buy-to-let market has proven that there is nothing to stop a dedicated group discreetly renting property in various parts of the United Kingdom, going about their daily routines, with the sole intention of manufacturing a device that will eventually be used to cause material and human carnage.

Our client’s considers it prudent to insure for this risk as if the property were to be destroyed by an act of terrorism and cover was not in place, the homeowners would be liable to pay for the rebuild costs.

In our experience the First-tier Tribunal agree that this risk should be covered. Furthermore, this matter has been considered by the Lands Tribunal, who found the provision of terrorism insurance to be allowable and reasonable.  This decision is binding on future First-tier Tribunals.

In addition, The Royal Institute of Chartered Surveyors Management Code recommends that strong consideration is taken regarding placing terrorism cover.

Locations will be rated differently according to where they are situated, and these are shown by the various zones below:

  • Zone A covers Central London
  • Zone B includes inner London and the business districts of major cities
  • Zone C covers the remainder of England, excluding Devon and Cornwall
  • Zone D covers the rest of Great Britain

The policy covers Property Owners Liability & provides protection in respect of claims from third parties if they suffer personal injury or property damage and insures the cost of damages awarded to third parties who are killed or injured at the insured property and the cost of appropriate legal defence at court and any subsequent appeal.  In an increasingly litigious environment, legal costs can be very significant.  Some factors which should be considered, when determining the sum to insure including:

  • The increasing cost and complexity of medical procedures
  • The cost of providing care and support to injured parties, which might be required for life
  • Claims could be brought by non-UK residents. The territorial limits under the policy means that all claims will be tried in a UK court; but should the claimant be from North America or other areas where costs are higher it could see the UK court awarding compensation that recognises the additional costs associated with claimant’s country of residence.
  • The statute of limitations allows a long time for claims to be brought after the event occurs. The cost of settlements often increases over time
  • The policy insures a limit per claim, not per person, and as such the sum needs to cover the risk of several people being injured at the same time
  • Legal decisions are increasing the scope of what can be claimed at court, including trauma for events that are witnessed

The highest award in the UK to an individual is c£24m when long term care is included, which does not include the costs of defending such a claim.

Under your policy, we have been able to increase the declared value for these possible liabilities to £25m.  We were able to negotiate this without any increase in cost.

This section of the policy is intended to protect the value of the declared value against the cumulative effects of inflation over the time that it takes to restore/rebuild the property after damage. 

It is very difficult to accurately assess the time that it will take to rebuild a property after it has been damaged, and thus assess the amount of inflation that may occur.  Factors that should be considered include:

  • Residential buildings are increasingly complicated structures and include more integrated facilities than were commonplace previously – including communications, heating and ventilation, lifts and security/access amongst others. This can significantly increase the reinstatement period.
  • The time it will take to obtain planning permission, including any appeal process that may be required
  • The time to design the rebuilding works and any changes that may be required to the original building
  • The likely rate of inflation, bearing in mind the risk of unforeseen economic variations.

Under your insurance policy an inflation uplift of 50% has been elected.  This is in line with advice from insurance professionals and is intended to provide protection against all these contingencies.  Please note that the premium is not charged upon the day one adjusted value - but upon the starting sum – or declared value.  As such the inflation protection is essentially free of charge so there is no downside to choosing an uplift that provides appropriate protection.

This section of the policy provides insurance against the costs of providing alternative accommodation to residents, or loss of rent for landlords, if your home is not suitable for habitation after it has been damaged.  The declared value needs to be high enough to cover accommodation costs over the likely reinstatement period, which as discussed above, could be a prolonged period and could be in respect of all occupants if a serious incident, so must be adequate.

It is often difficult to find enough good quality accommodation in the right location after a large residential building has been damaged.  This drives up costs and minimum rental periods significantly.

As with the 'day one' provision, premiums are charged upon the declared value and not the uplifted sum including alternative accommodation, so there is no penalty cost for selecting the appropriate amount of Insurance coverage.  Effectively the premium would be the same if a limit of 10%, 20% or any other value was to be substituted for the existing 45%.

The services that we provide vary from property to property, and from year to year based upon the specific circumstances at the time.  Individual locations have individual needs, but our work typically includes:

  • Assistance to Homeowners, Property Managers and other interested parties on insurance related queries (policy conditions, making claims etc)
  • Providing copy policies, insurance certification and other documentation to homeowners, mortgagors, and others as appropriate
  • Ensuring that the policy is remarketed appropriately to obtain good value for money in terms of coverage, claims service, financial security and price
  • Attending property surveys as required by insurers for underwriting or claims management reasons
  • Dealing with specific advice issues for individual homeowners
  • Liaison with insurers, brokers, loss adjusters, claims handlers, Mortgage Companies and other parties who have an interest in the insurance policy
  • Monitoring all claims to ensure that homeowners are treated fairly, and claims are settled as speedily as possible
  • Ensuring that modern methods of risk management are applied – especially after claims have happened to try to avoid the same problems happening again
  • Provision of ownership, property construction and other relevant information to insurance companies to keep costs under control
  • Recovering claims cost (subrogation) from negligent parties where possible to try to avoid premium cost increases in the future
  • Regular claims and Risk Management meetings with insurers and brokers to ensure that the best and most up to date standards and techniques are used to control cost and deliver value
  • Ensuring appropriate rebuilding cost assessments are undertaken regularly, and checking for accuracy
  • Compliance with the FCA and other relevant governance regulations
  • Reviewing alternative quotations submitted by Homeowners and Property Managers
  • Going through the renewals when due with the brokers

Please note that you can contact our insurance team to obtain insurance documentation.

You can email the team on insurance@e-m.uk.com and provide your account number and property address and one of the team will be able to provide you with any requested documentation.

We may need to liaise with the relevant broker to obtain the up to date insurance documentation but that should not cause too much of a delay and usually can provide the information the same day or the day after.

Please be advised that we are committed to sourcing competitive premiums on behalf of our homeowners and would be happy for you to obtain alternative quotations on a ‘like for like’ basis as the current policy.  

The levels of cover that we would require the quote is obtained on includes:

  • Day One Uplift at 50% - See question on policy limits as to rationale behind this figure.
  • Alternative Accommodation/Loss or Rent at 45% - See question on policy limits as to rationale behind this figure.
  • Property Owners Liability at £25m - See question on policy limits as to rationale behind this figure.
  • You should also disclose the claims history for the site

Once you have done this then you can send us the quote along with the policy wording and we will refer it to the insurers for them to review.

Remuneration is a standard feature of all insurance policies and is typically paid in relation to services that are provided by brokers, freeholders, property managers and other involved parties.

In respect of each accounting year, a remuneration is paid to the relevant broker as remuneration for the services rendered by it.  The remunerations are properly payable and reasonably charged as part of the insurance premium.

The remunerations are inclusive and not additional to the premiums charged by the insurer.

If it were the case that the services and administration functions outsourced by the insurers were undertaken in-house by the insurers themselves, they would have to make allowance within the premiums for the costs of such services and functions and would retain the remuneration themselves.

The Landlord is often responsible for the insurance of a building so that it can be rebuilt if it is completely destroyed.  The exact requirements will be contained within the lease or transfer document relating to a property. Buildings insurance is different to household contents insurance. It is the responsibility of homeowners to obtain their own household contents insurance. 

We work with a panel of insurance brokers to ensure our insurance offerings are fit for purpose, responsive and reasonably priced.  

It is important that insurance invoices are paid promptly so that blocks remain insured and all homeowners are covered.  

If you have any queries relating to your insurance arrangements, you can contact our specialist Insurance Team who will be able to assist you with any enquiries you may have including making a claim.

Your building insurance premium will either be invoiced with your service charges by your property manager or will be invoiced to you directly by our nominated insurance brokers, Tysers.

Payment will be due at the commencement date of your 12 month policy and you should receive documentation prior to the commencement date.

When you have received the invoice from Tysers please make payment to them as soon as you can.  If you need to contact them their details are:

Tysers
71 Fenchurch Street
London
EC3M 4BS
020 3037 8411
schemes@tysers.com

Occasionally if your premium remains outstanding with Tysers after a period they may ask our client to fund the insurance premium.  If this is the case our client will pay the premium to Tysers to ensure that the cover remains in place and then add the premium along with a £70 arrears charge for non-payment of insurance to your ground rent account.  If we do this, we will then write to you to confirm that we have done this and that the insurance premium is now due to ourselves rather than Tysers.  To avoid this please ensure you pay Tysers promptly when you receive the initial bill from them and then our client will not need to fund the insurance on your behalf.