Question 1

Insurance Hike

Accepted Answer

Q: About 14 months ago there was a change of freeholder and since then there has been a dramatic increase in the cost of our buildings insurance - about 40 per cent. A relatively small part of this can be accounted for because the new freeholder says we need to include terrorism insurance, but otherwise we have had no satisfactory explanation. To give you a guide, I am being asked to pay £362 pa for a 103 square metre, two-bed flat. Could you tell us, please, whether we have the right to be told what commission, or other form of income our freeholder receives for arranging this insurance; and also whether we should be able to see "evidence of research" by the freeholder or a broker if one was used, so that we can establish whether the deal we are on is a reasonable one? If we do have the right to this kind of information but the freeholder withholds it, what should be our next step? Is there anything else we could usefully do? Hon Consultant Belinda Thorpe replies: As the freeholder has arranged the insurance, then you do have the right to request what commission is being taken. I would suggest to ask specifically what amount and percentage of commission is being taken by the freeholder, rather than just asking what commission is being taken from arranging the policy as this could also include their insurance broker’s commission. If the freeholder does not provide the information requested, then you can take the freeholder to the First Tier Tribunal, however you would be expected to pay the fee for this hearing. [submitted February 2016]

Question 2

Insurance Hike

Accepted Answer

Q: About 14 months ago there was a change of freeholder and since then there has been a dramatic increase in the cost of our buildings insurance - about 40 per cent. A relatively small part of this can be accounted for because the new freeholder says we need to include terrorism insurance, but otherwise we have had no satisfactory explanation. To give you a guide, I am being asked to pay £362 pa for a 103 square metre, two-bed flat. Could you tell us, please, whether we have the right to be told what commission, or other form of income our freeholder receives for arranging this insurance; and also whether we should be able to see "evidence of research" by the freeholder or a broker if one was used, so that we can establish whether the deal we are on is a reasonable one? If we do have the right to this kind of information but the freeholder withholds it, what should be our next step? Is there anything else we could usefully do? Hon Consultant Belinda Thorpe replies: As the freeholder has arranged the insurance, then you do have the right to request what commission is being taken. I would suggest to ask specifically what amount and percentage of commission is being taken by the freeholder, rather than just asking what commission is being taken from arranging the policy as this could also include their insurance broker’s commission. If the freeholder does not provide the information requested, then you can take the freeholder to the First Tier Tribunal, however you would be expected to pay the fee for this hearing. [submitted February 2016]

Insurance Hike

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