How can I keep my insurance costs down?

That dreaded time comes round when you have received your insurance renewal quote through your post box… have you ever considered what Insurers look at when they are calculating your premium or what you can do to help keep the cost down?

Here are a few areas that could assist:

Sum Insured

Most important is a regular valuation to ensure that your properties Sum Insured or Declared Value stays adequate. Often we see policyholders insuring their property for the resale cost, rather than the rebuilding cost – which is often very, very different and could cost a lot more.

Subsidence

Insurers have postcode checkers which identify areas that are likely to have a greater likelihood of flood or subsidence instances. If your property is in a known area for subsidence and you have trees around your property provide details of your ongoing grounds maintenance program to show trees and vegetation are under a regular program to manage their growth.

Flood

If your property is in an area known for possible flooding it is worth investing some time to find out what flood defences are already in place. If your property is on a hill, even if in a flood area, this is also helpful information to provide Insurers with.

Risk Assessments 

Provide evidence these have been under-taken and are recorded and regularly reviewed.

Controlled or restricted access

CCTV, on-site concierge or telephone access facilities, where each resident requiring key-holder or pass-holder for access to the property.

Automatic Fire Alarm

Advise if there is an automatic fire alarm with signalling direct to the emergency services, central call station or alarm monitoring station.

Fully managed developments 

With ongoing contracts for the upkeep and maintenance of the property/grounds by professional service providers and facilities contractors, which could also include evidence of regular and periodic inspections of flat roof areas.

Electrical wiring checks

Being able to evidence electrical wiring within the common areas is being inspected and maintained to current requirements.

Other features

If there are enhanced or additional features to prevent or reduce claims, for example sprinkler systems; specific construction features designed to illuminate or reduce spread of fire; in built water leak detection devices etc or flood resilient or flood protection construction features.

Other things that can affect your premium are:

Construction

Concrete floors and stairs are considered a better risk than timber floors and stairs and preferential rates will be applied on these quotes.

Flat timber roofs are also a concern; however flat concrete roofs, with a guarantee could earn you some more brownie points!

If your roof is out of guarantee, a regular roof inspection and an inspection report to confirm the condition of your roof is adequate can also help.

Age

Particularly in converted properties, the older the property normally the more higher the rate that is applied, simply due to internal features being more ornate, and also harder to locate at the time of a claim.

Communal Facilities

There is a greater public liability risk for Insurers with properties which have tennis courts, swimming pools and gymnasiums.

Excesses

Similarly to motor insurance – the higher your excess the lower your premium. The first part of a claim which is paid by the Policyholder.

The Insurer pays amounts in “excess” of this first amount. An excess may be compulsory (i.e. imposed by the Insurer) or voluntary (i.e. accepted by the Policyholder in return for a premium reduction).

Remember though, when you ask for alternative quotes you should notify the new Insurer that you have requested a higher excess as some underwriters may deem a higher excess be due to a poor claims experience, and therefore increase your premium… just in case!

Subject to the block conforming with the Insurer’s underwriting criteria most specialist intermediaries will have the authority to apply a “rate” to your reinstatement cost (Declared Value or Sum Insured) apply to your sum insured, for example:

£1,000,000 (Declared Value/Sum Insured) x 0.080 (example insurance rate)

= £800.00 + 12% IPT (Insurance Premium Tax)

= £896.00.
The premium quoted for this block would be £896.00.

Belinda Thorpe is the Managing Director of Residentsline, whose exclusive Residential Buildings Insurance policies are designed specifically for blocks of flats and apartments.