The appropriate specialist insurer for block management insurance can make a real difference to how well a residential block is protected. Block management insurance is meant to cover the specific hazards of managing communal residential buildings where many owners, renters, shared amenities and duties might mean a more complex insurance need than a normal residential policy.
If you’re a property manager, freeholder, residents’ association or arranging cover on behalf of a residential block, it’s important to understand what specialist block management insurance entails and how to find an insurer that really understands the needs of the property.
What is covered under block management insurance
The first step in choosing an appropriate specialist insurer is to identify the risks that may have to be covered by block management insurance. A block of flats is more than just a bundle of separate houses. The building may have communal entrances, stairwells, lifts, corridors, roofs, plant rooms, gardens, parking bays and other shared areas. There can also be obligations for maintenance, contractors, employees, residents and visitors.
So block management insurance may be a combination of property and liability risks. Damage to the property is usually a major concern and is covered by buildings insurance. Block management insurance may also need to consider property owners’ liabilities, employers’ responsibility, community contents, and other related risks, depending on the circumstances.
Think about the building’s design, age, number of units, occupancy, any past claims and any odd features before you talk to insurers. Having the right information at hand can make it easier to get meaningful quotes and help ensure the policy is based on actual risk.
Choose real expert experience
When you are looking for block management insurance one of the most crucial things to examine is whether the insurer has experience with residential blocks. Specialist knowledge can be especially beneficial as the dangers on common property can be very different to those covered by a regular residential or commercial insurance policy.
Specialist insurers will know about things like leasehold arrangements, shared areas, various occupancies and the obligations that can fall amongst freeholders, leaseholders and property managers. This information might be useful in analysing the building and deciding on the types of cover that might be appropriate.
When you speak to potential insurers about block management insurance, ask them how much experience they have with properties like yours. Not only is the goal to obtain a policy at a low price, but also to determine whether the insurer understands the characteristics of the property and can give suitable insurance.
See the scope of the policy.
Price is of course a key but should not be the only issue when comparing block management insurance. A lower premium can be poor value if the policy contains major exclusions, restrictions or inadequate limits of indemnity.
Carefully read the policy wording and learn what is covered. Pay particular attention to insured risks, exclusions, excesses, liability cover and any circumstances that might affect a claim. Where relevant, it is also crucial to know if any community fixtures, shared facilities and external constructions are included.
The coverage of block management insurance should be appropriate for the building’s characteristics. For example, a property with lifts, underground parking, landscaped community grounds or other speciality facilities may have different insurance requirements to a smaller block with relatively simple shared areas.
Never assume that two policies offering apparently comparable block management insurance are offering the same cover. The subtleties in the phrase can make a huge difference.
Give correct information
Part of getting the right block management insurance is giving insurers with the right information. Incorrect details might cause problems down the line, especially if they influence the riskiness of something or the truthfulness of a claim.
Information may include the rebuild value of the property, materials of construction, roof type, number of flats, number of storeys and provisions for occupation. You may also be asked for details of prior claims, renovations, empty flats or commercial premises in the building.
Focus on the rebuild value in particular. The sum insured should be calculated based on the expected cost of rebuilding the property after a severe loss, and not the market value. Under-insurance can have major financial ramifications and can impact what can be recovered following a claim.
This is why a professional appraisal or a proper rebuilding cost estimate might be essential when organising block management insurance, especially for bigger or more complicated structures.
Take into account the specifics of the property
Each block is different and the best suited block management insurance will rely on the unique risk. Your specialised insurer should be able to talk you through the features that make your property unique.
For example, the insurer could want to know whether the building has been significantly refurbished, if it has commercial units, if there are long-term vacancies or if there are peculiar design elements. The location of the property is also a factor that can impact the level of danger.
Older buildings may have further concerns, notably with aged roofs, electrical systems, plumbing installations or other infrastructure. Equally, houses with flat roofs, non-standard construction or specific external cladding materials may need a more extensive study.
A clearer picture of the property can be presented to the insurer, providing a more accurate basis for block management insurance.
claims history review
Another key consideration in obtaining block management insurance is claims history. Insurance companies will typically want to know about prior losses because claims can give a picture of the risk profile of the property.
When analysing past claims, go beyond the overall amount paid. Think about what caused the problems and whether any remedial work has been done. Repeated water escape claims can be a sign of plumbing problems that need to be fixed. Availability and cost of block management insurance may be affected by recurring damage.
If there have been improvements following past claims, ensure this is reported properly. Showing the underlying issues have been addressed can assist in giving insurers a more complete picture of the current risk.
Caution against excesses
Excess The amount the policy holder has to pay toward an insured claim. Block management insurance policies may have various excesses for different losses.
It is crucial to know these quantities before you choose an insurance. The premium may be lower but the excess will be higher and this could mean that you pay a lot more when you claim. In contrast, a higher premium policy might in some instances have smaller excesses.
Sometimes specific excesses apply for water damage, subsidence and other higher risk situations. When considering block management insurance, compare them closely so you know what the prospective financial contribution will be after a claim.
Check liability coverage
Liability cover can be a particularly significant element of block management insurance. Residents and visitors use community areas on a daily basis, as do contractors and service providers going through them.
Cover for property owners’ liability may assist protect against some claims arising from injury or property damage in connection with the insured premises, according to the conditions of the policy. Where employees are engaged, the employer’s responsibility requirements may also need to be taken into account.
The level and extent of liability protection that is suitable will depend on the circumstances. A specialist insurer will be able to clarify the provisions that are relevant to you and to point out areas that may need particular attention.
Ask about the terms and duties of the policy
Some insurance plans may contain terms requiring the policyholder to take reasonable steps to reduce risks. These can be maintenance, security, inspections, heating systems or other property management spaces.
These requirements are vital to understand while getting block management insurance. A policy can provide useful protection but, if the required conditions are not met, it can impact a claim.
Ask the insurer to clarify any significant conditions in straightforward language. Be sure the property managers are aware of any specific maintenance or risk-management procedures that need to be taken into consideration.
Compare quotes on an apples-for-apples basis
Getting a few block management insurance quotes may help you get a feel for what’s out there, but be careful when you compare them. If you look at the premium alone you will be misled.
Instead compare the sums covered, insured risks, exclusions, liability limits, excesses and key policy conditions. Think about whether the same things and assumptions are being quoted. Prices may not be directly comparable, as one insurer may have been supplied different information to another.
In comparing block management insurance it is important to look at the entire quality and applicability of the policy and not just the cost.
Think on the quality of communication
Once you get block management insurance, the relationship with an insurer doesn’t stop. If a claim happens or if conditions change throughout the insurance period, straightforward communication might become very vital.
See how quick the insurer is while quoting. Do they respond well to questions? Are the policy terms explained in straightforward language? Are requests for information handled in an expedient manner?
For property managers, who have to deal with many different stakeholders, good communication can be particularly helpful. Open communication from an insurer can make block management insurance administration much easier.
Review the policy periodically
Finding the right block management insurance is not a one-off. Over time things may alter in the property and insurance arrangements should be examined properly.
Renovations, improvements to shared amenities, changes of occupancy, adding commercial premises or large changes in rebuilding expenses may affect the insurance needs.
It’s also a good idea to frequently evaluate the claims history. If recurring issues have been identified, tackling the causes may assist improve the risk profile of the property.
So renewal is a good opportunity to check your block management insurance, not just auto renew it.
Make a well-informed judgement
The key to block management insurance is to find a specialist insurer and tailor the coverage to the true hazards of the building. The best way to do this is more than just looking for the lowest premium. It involves an understanding of the building, a detailed comparison of policy conditions and a review of the insurer’s experience with similar buildings.
Start by acquiring reliable information about the block and identifying the key dangers. Contact insurers with appropriate experience and ask specific questions about their block management insurance. examine for exclusions and excesses, examine the liability protection and ensure the quantities covered are sufficient. Read the policy wording.
Taking a thorough approach will help property owners and managers to make a more educated decision about block management insurance and lessen the possibility of finding gaps in protection when a claim arises. Specialist knowledge, reliable information and careful evaluation of policies are all key factors of arranging insurance that meets the demands of a residential complex.