There are thousands of houses that have been converted into flats. With huge demand for housing in some areas, converting a house into several flats is a great way to increase both the rental income and overall value of a property.
However, problems can arise when purchasing a flat in a converted house. Owners of flats generally only own a leasehold (sometimes up to 999 years). Someone else may then own the actual building itself (the freehold).
This leads to questions about getting the right insurance for the building. Who is responsible for this? Who pays for it? And is the insurance policy the right one? As you can see, finding insurance for converted flats is not easy! ?
This is where our expertise comes in! ??
We were approached by customer who lives in a flat in a converted house (one of two flats in property). They bought their flat on a long leasehold (999 years) and also bought the freehold of the building at the same time.
As the freeholder, they were advised, at the time of purchase, that they’re responsible for insuring the building. ?
They approached a local insurance broker who arranged a Landlords Insurance policy for them. They trusted this broker and renewed the policy for several years in a row, thinking they had the right insurance and that their broker was looking after them.
Each year their broker just sent out their renewal documents, with no contact other than an email with the documents.
Their broker never called them before sending them their renewal documents.
In fact, and they hadn’t spoken to their broker for several years! 🙁
When this customer came to us, they didn’t know what they were paying for or why their insurance kept going up, year-after-year. They also thought that their policy was very expensive – which it turns out it was!
They came to us to make sure they had the right policy, at the right price.
Like all great relationships, this one started with a conversation. We love to speak to our customers, and so we had a good chat to really understand their needs. ☎️
We also had a comprehensive look through their current policy to see what it covered – and what it didn’t!
After speaking to the customer and looking through their current policy, it was clear that not only was their policy very expensive, but it didn’t actually give them the cover they needed.
So, they were paying a lot of money for something that didn’t give them any cover!
After reviewing the customers current insurance policy, including their current broker’s renewal, we found several problems.
As a benchmark, we got quotations for the customer on an exact like-for-like basis as their current policy. At this first stage, we were able to lower the cost of their policy by over 10% – and this was just the start.
After speaking to the customer, it was clear that their current policy covered for several things they didn’t need – but which they were paying for.
Their policy covered £25,000 worth of cover for ‘Landlords Contents’. But wait, they didn’t have any ‘landlords contents’, only their own contents and possessions in their own flat – which were covered (correctly) under a separate home insurance policy.
They were also paying for ‘Rental Income’, which had a level of cover for over £100,000. But wait again, they weren’t renting out a property, so they didn’t have any rental income to cover in the first place.
The customer’s building also had a small, flat roof extension at the rear. This was noted on their current policy; however, the policy had a condition that the roof must be inspection every year by a specialist roofing contractor who has to provide a written report about the condition of the roof. Every year!
The flat roof had been completely re-covered only a few years ago. They had told their broker this, but the condition to have the roof inspected every year had not been discussed with them.
Apart from paying too much, and paying for things they didn’t need, we found a problem with their current policy that was much, much bigger – their policy didn’t actually cover them at all!
Their current broker had provided them with a standard Landlords Insurance policy. Which may have been ok if they were standard landlords – which they’re not.
After carefully going through their policy and found that it had several conditions that meant they would never actually be able to make a claim.
These included:
- Condition for tenancy agreement to be in place – there were no tenants as they lived in their flat and they didn’t own the other
- Condition for regular inspections – ok, they can inspect their own flat (?) but they’ve never even set foot in the other flat – and certainly can’t inspect it every 6 months!
Their policy was from a very good insurer – but it certainly wasn’t designed for what they needed.
Some brokers work with just a single insurer and put together (what they think) is a very good policy. They then offer this to all their customers – regardless of what the customer wants or needs.
So, the broker is actually working for the insurance company, not their customers (in technical terms they are called ‘Agents of the Insurer’).
We work for our customers. And we always find the policy that’s right for them, at the right price.
We spoke customer to find out what they really needed. By owning the freehold of the building there were landlords, but not in the traditional sense. Therefore, they needed a policy that recognised this.
Getting the right cover for our customers is the most important thing to us – there’s no point in trying to save money if your insurance policy is worthless.
We found several problem areas with the customers current insurance policy. After this, identified what they really needed and started our search for the best policy for them.
As well as finding what they needed, we also took off the parts of the policy that they didn’t need. Why pay for something you don’t need?
We then searched our large panel of providers to find them a policy that covered their needs exactly.
Getting the right cover is the most important thing. But it’s also important not to overpay for your landlord’s insurance.
With the customers needs sorted, we then focused on getting the cover they needed at the right price. And we did just that!
We used our expert knowledge to search for the best insurers for this customer. We also removed all the things they didn’t need (but for many years had been paying for).
The result was a fantastic saving of over 30% for the cost of their policy! ?
Paying for your insurance may not be the most the exciting thing in the world – so why pay more than you need to?
When we first spoke to this customer they were in despair. They didn’t know what they were paying for or whether the policy was actually the right one.
All they knew was that the cost of their policy went up every year. And that their broker never bothered to speak to them.
This customer now has a policy that covers exactly what they need whilst saving over 30% of what they used to pay.
And we get another happy customer to look after for years to come. ?
