That dreaded time comes round when you have received your insurance renewal details through your post box… have you ever considered what Insurers look at when they are calculating your premium or what you can do to help keep the cost down?
Sinead Campbell, of London Flats Insurance, discusses what insurers look at when they are calculating your insurance premium, and what you can do to get a better price, which is particularly important with the current hardening insurance market, leading to most Residents’ Management Companies seeing premium increases in 2021.
The starting point of all insurance premiums is the Declared Value or Sum Insured – you can locate this on your current years policy schedule.
Most important is a regular reinstatement cost assessment to ensure that your property’s sum insured or declared value stays adequate. Often, we see policyholders insuring their property for the resale cost, rather than the rebuilding cost – which is often very, very different and leads to your insurance premium costing more. A major benefit of having a periodic “re-valuation” and adjusting the sum insured accordingly will avoid any problems of over or under insurance.
Subsidence
Insurers have postcode checking tools which identify areas that are likely to be more susceptible to subsidence or flooding. If your property is in a known area for subsidence and you have trees around your property, provide details of your ongoing grounds maintenance program to show trees and vegetation are regularly checked and their growth is kept under control. By controlling growth and containing the leaf canopy of your trees and shrubs this will limit the amount of moisture extraction from the ground by roots which is a major contributory factor in destabilising the subsoil in many subsidence areas.
Flood
If your property is in an area known for possible flooding it is worth investing some time to find out what flood defences are already in place. If your property is on a hill, even if in a flood area, this is also helpful information to provide insurers with. You may want to keep in mind that flooding from “surface water run off “is becoming more of a concern for insurance companies so be prepared to point out if your property benefits from any natural or purpose-built drainage.
Risk Assessments
Provide evidence that any required works noticed in the risk assessments have been under-taken, are recorded and are regularly reviewed.
Controlled or restricted access
Advise if your property has CCTV, an on-site concierge or telephone access facilities, or if each resident requires a key-holder or pass-holder for access to the property.
Automatic Fire Alarm
Advise if there is an automatic fire alarm with signalling direct to the emergency services, central call station or alarm monitoring station.
Fully managed developments
Alert your Insurers of any ongoing contracts for the upkeep and maintenance of the property/grounds by professional service providers and facilities contractors, which could also include evidence of periodic inspections of flat roof areas.
Electrical wiring checks
It is important to be able to evidence that electrical wiring within the common areas is being inspected and maintained to current requirements.
Other features
If there are enhanced or additional features to prevent or reduce claims (for example sprinkler systems), specific construction features designed to illuminate or reduce spread of fire (in built water leak detection devices etc or flood resilient or flood protection construction features).
Other things that can affect your premium are:
Construction
Concrete floors and stairs are not combustible whereas timber floors and stairs are, so preferential rates can be applied for this feature. Flat timber roofs are also a concern; flat concrete roofs are generally more robust, have a longer life-span and fewer maintenance issues which results in lower premiums.
If your roof is out of guarantee, organise a periodic roof inspection and a report to confirm the condition is adequate. If you can prove you are regularly checking for wear and tear there will be less chance of disputes over the cause of damage when it occurs.
Age
In older buildings the architectural features may be more ornate, or the materials are harder to locate – even a small area of damage may require additional construction skills and this would be reflected in the premium.
Communal Facilities
insurers will consider that properties which have tennis courts, swimming pools and gymnasiums as having a greater liability risk – which could lead to an additional charge being applied.
Excesses
Similarly to motor insurance – the higher your excess the lower your premium. Excess is the first part of a claim which is paid by the Policyholder.
The Insurer pays amounts in “excess” of this first amount. An excess may be compulsory (i.e., imposed by the Insurer) or voluntary (i.e., accepted by the Policyholder in return for a premium reduction).
Subject to the block meeting with the Insurer’s underwriting criteria, most specialist intermediaries will have the authority to apply adjustments to the premium required to reflect the favourable features we have outlined above.
Sinead Duffy is Senior Underwriter at London Flats Insurance, whose exclusive Residential Buildings Insurance policies are designed specifically for blocks of flats and apartments in London. www.londonflatsinsurance.co.uk. To discuss any part of this email or for any other assistance please call us on 020 7993 3034.
