We live in an age of constant development, growth, and inflation. The news is filled with reports documenting the increase of in the cost of living across the country. The insurance market is no different.
Going Up, Up, Up
Why has there been such a drastic increase?
Firstly, costs across the board are going up for everyone. As the cost of rebuilding or repairing damage increases, so does the insurance premium to cover than eventuality. A calculation done by Deacon Insurance, specialist insurer of blocks of flats, proves this in the reported increases in rebuilding costs from £500,000 to over £544,000 in just one year. You can check rebuilding and repairing costs by checking the Buildings Declared Value on the policy document. This is a calculation that includes the value of the building itself, to everything that’s fixed to the property, from kitchens to bathrooms. Insurance providers will refer to this value to base the premium on the costs that may need to be met. You will also see a second first, the BSI, or Building Sum Insured. This covers any increases in cots over the year – this is a figure you can expect to change due to inflation.
Regardless of the size of the claim, it will definitely be affected if you are not completely insured as your policy may not have taken the increase if rebuilding and repair costs into consideration. In 2021, insurance rose significantly due to a number of factors, including a lack of contractors and the increasing cost of raw materials. Furthermore, the housing shortage hiked up the prices of alternative accommodation too. As a result, some providers stopped offering insurance in flats which led to the providers continuing to do so needing to up their prices in order to remain profitable.
The second thing affecting the price of insurance for flat owners is the number of claims. Claims history has a big impact on premiums so do all you can to prove yourself as a lower risk to a potential provider. One of the most common insurance claims is for water damage – ensure to keep reminding the occupants of the building to carry out basic maintenance checks and precautions. By doing so, a potential problem may be uncovered before it is left to do too much damage. When repeated claims are made for the same issue, premiums shoot up, even leading to the insurer decline to provide any cover at all!
The industry has recently entered something called a “hard market” for both property and insurance. Not only are premiums increasing but offers from insurance provers are declining as they become less willing to take on risks with their clients.
There are Ways to Save Some Money!
What can be done to save some money?
By implementing a few little suggestions, you can help yourself when it comes to rising insurance premium prices. Make sure your policy fits the needs of your property so you can avoid paying for cover for things you don’t need. Get the help of an insurance broker to help you find a policy that fits your blocks individual needs and doesn’t break the bank.
A simple way of reducing premiums is to choose a policy with a bigger excess, but of course you need to remember that this figure is what will come out of your pocket if you must make a claim at some point. Do some research and weigh up the different options regarding excess and premium and come to a solution that works for you, and your property, personally.