Although building insurance can be quite a dry topic with insurance companies being seen as a means to an end (much like property managers), it is an important and typically expensive element of a service charge budget, which needs to be thoughtfully addressed.
Freehold Management Services Ltd have been asked many times for our top tips and tricks to reduce buildings insurance premiums which has led us to compile the below list that property managers and resident management companies/leaseholders can use to reduce and manage your buildings insurance:
You should never accept the first and only, so make sure your property manager or person responsible for the insurance get at least 3 quotes. There are many insurers available with competitive premiums so use this to your advantage.
Get a valuation
When commencing management of a property, Freehold Management Services always suggest that a full insurance valuation is completed if it hasn’t been completed recently. Insurance reduces financial impact on the policyholder should a risk occur and the last situation you would want is to find out that the policy is underinsured.
Increase your excess
If insurance claims have become a regular occurrence in your building, discussing the possibility of increasing the insurance excesses may bring the overall premium down and warn off any consistent claimers. The usual risks on building insurance policies are: escape of water, fire/lightning, explosion, subsidence and accidental damage.
Building insurance tends to become a hot topic when claims become a regular occurrence. More often than not, these claims are attributed to water leaks throughout the building. Ensure you have a PM with a proactive maintenance plan which will help prevent further issues arising. The damage may already be done with increased claims leading to increased premiums but proactivity can reduce premiums over time.
Most property managers are in a position to organise credit for their clients who can then pay premiums monthly, however, this can increase your annual cost by up to 10% in some cases so it’s important to find out the overall cost. It is financially prudent to manage the service charge accurately to pay for the building insurance in one annual payment.