Massive Insurance increase

[leaseholdanswers]

Yes that's right it becomes murkier when insurance is bought via a broker on their "block" policy where the terms are harder to establish. What is the difference in a landlord insuring with an insurer with a block policy and they, or a one off client, buying it from a broker- both spread loss/profit across the policy.

It boils down to given a clear claims history and assessment of current risks, what can be shown to be sensible terms and premium.

[flatpackman]

The freeholder has told the manager of our block he will keep it on his block policy ( I suspect they get commission). The premium will be neatly £4,000.

Inorder to ensure the freeholder hs getting the best deal on their block
Policy can we insist on seeing details of the other risks that are put on the same policy so we can see if we can get a better rate.

The manager seems keen to accept the landlords offer provided the policy is issued in the name of the manager and the freeholder. The freeholder says he wil only allow the interest of the manager to be noted on the policy.

Any thoughts

[leaseholdanswers]

The section 30A request can be served on the manager and the landlord to get the summary and in due the course the policy but the manager ought to check with the LVT chair for authority to insure in this way, unless they simply place, as manager, insurance with the landlord or landlords broker, as long as whichever of them is FSA registered.

I would check that mortgagees are happy about restrictions noting of interest on the policy. Similarly do not overlook that the correct value is placed on the property.

As to commission well the possible opportunity to challenge is there, but given the disparity in the premiums, I am tempted to comment " what does the Meshugina want, blood?"

[Tulula]

Gift horses and mouths spring to mind.

[flatpackman]

Thanks for your input but it looks as of the business will have to go on the freeholders block policy it seems totally wrong that he should gain a financial advantage from a run of bad luck effecting our property. Because of the appointment of a manger we accept the freeholder does not have to step in

I believe he could be getting around 20% commission for simply having it on his block policy i.e. he stands to make 20% on £4,000 = £800. It would be reasonable for him to get something for having the advantage of being able to get us cover but £800 is totally out of all proportion considering he has not got to do more than a few minutes work. What do you think would be reasonable bearing in mind that he should not get anything as he is not FSA registered

[MCPH]

It appears too late now but did you consider increasing the excess for a claim to reduce the premium?

What did the previous claims relate too other than the 25k for personal injury. The they were for flood/water damage then you could increase this excess and leave the others lower. I have done this with a client and whilst not ideal it kept the premium sensible. This particular claims history is 80k over 5 years.

The insured does not have to be FAA registered. There is a lot of myth and bunkum about FSA requirements.

[leaseholdanswers]

While the Insured need not in the first instance be FSA registered if they
a: assist in the administration and performance of a contract of insurance,
b: effecting or carrying out contracts of insurance as principal
they do. My post was quite clear, in so far as I am not sure who will do this, that it would apply to that person.

The OP misunderstands the nature of commission; while there are firms who are spectacular in bolting on large amounts of commission, the normal commission is a commercial arrangement for the agent or broker selling the product- the insurer pays their own sales staff and pays, through commission, the outsourced sales staff of a broker/agent. The same cost applies to handling claims. That money is therefore not going to be deducted from the premium as it is not an add on. LVT determinations explain this quite clearly and differentiate, more or less, between a sensible earned commission and an extortionate one.

But having ousted the landlord you are the author of your own misfortune. That he is prepared to insure, and may indeed benefit financially, is to your benefit.

If you press it he might say "tough".

£8000 reduced to £4000 and you begrudge £800, or you get stuck with £8K?

I say again "what does the meshugina want, blood?"- feed the gift horse my friend.

[MCPH]

Helpful document here http://www.fsa.gov.uk/smallfirms/your_firm_type/gi/library/imd.shtml

Regarding how managing agents should be registered and activities which are covered.