Q: Our lease allows the freeholder to place the insurance without consulting us, and I believe the longstanding cosy relationship they have with their insurers does not work in the interest of residents. We therefore want to obtain quotations from alternative insurers and then coax, cajole or pressure the freeholder into accepting what would be a better deal from the RMC’s point of view.
How can we go about this? What insurer or broker could we approach?
FPRA Chairman Bob Smytherman replies:
This is something that is very common and included in the lease of my block too. What we did was to seek a number (three is ideal) of quotations from other insurance providers. It’s important that you share with these companies the existing cover to ensure that the quotations are based on the same cover.
Hopefully the freeholder will then accept the new quotation without further challenge, however you may need to consider getting an independent valuation for insurance purposes to providing this evidence to the freeholder.
If they still object you will have to consider a tribunal application for unreasonable service charges. It’s important the freeholder discloses the commission they receive for organising the insurance as this will be vital evidence with any challenge.
The FPRA do not recommend any insurer or broker but would strongly advise seeking quotes from providers that specialise in ensuring blocks of flats for an RMC.
[Submitted July 2019]