As recognised by well-established insurance provider Deacon Insurance, arranging a policy for a block of flats can be complicated. Unlike insurance for a regular house, a “block policy” provides protection for you as the owner and can help to cover the cost of repairs and rebuilding in the worst-case scenario.
The owner of the building often lands the responsibility of arranging business insurance. The Times reported that a number of leaseholders experienced a 50% increase in their annual insurance bill in just one year. However, as a leaseholder, paying their share of the insurance premium is mandatory under the terms of their lease. It can feel like the most painful bill you have to pay, and it can be frustrating when you’re feeling like it is beyond your control regarding the choice of provider.
It pays to shop around and challenge renewal prices when they come around. If you’re a sole leaseholder and you have some reservations over about a hike in your share in the premium, you should feel able to question it with the people who manage your property.
A big factor currently hiking the prices in premiums is the current rate of inflation crippling the country. In March, inflation hit 7 percent as the country’s cost of living skyrocketed and continues to climb as time goes on. That latest rise is remarkably the highest increase in three decades and the effects are far reaching, across all industries.
You may not have control of global issues, but you can prepare for and control how they will affect you and your property expenses.
The cost of everything increasing includes building materials that would be needed in the event of repairing or rebuilding jobs. Furthermore, there is currently a significantly lack of contractors available and the price of alternative accommodation has risen dramatically. With these factors in mind, it’s easy to see why insurance premiums have gone up.
If your policy doesn’t increase to match inflation, you’ll find yourself underinsured and eventually out of pocket. Therefore, it is essential to check and monitor rebuilding and repair costs so that your policy can be regularly updated in correlation with inflation, in order to reflect current prices and costs. Take the initiative to have a revaluation completed at regular intervals to prevent the financial risks involved in becoming underinsured. Regardless of the size of the claim, there would be consequence in you are underinsured.
Although it’s impossible to prepare for and prevent anything that could give reason for claim, there are precautions you can take to limit the number of claims you make which will in turn have a positive effect on your premium. Educate residents and occupants on how to carry out their own maintenance checks in order to prevent problems from escalating when they arise.
The biggest cause of claims is water damage, but this can be pre-empted by checking and reporting all issues, big or small, from leaky taps to dripping hoses. Avoiding repeated claims about the same problems that make your premiums go up and prevent the problems that are easy to handle and improve on.
The insurance industry is facing a hardening market and as such, this means that not only are insurance premiums increasing but the offers of insurers are decreasing. Make your property as attractive as possible by improving your claims record and not only will your options for providers increase but your premiums and bills will go down too.
You also have a choice to make when it comes to excess: should you go for a lower excess with a higher premium? Or choose a higher excess with lower premium? The option is for you to decide once you have considered the long term pros and cons.