A block of flats insurance comparison that starts with the premium is comparing the wrong thing, because the premium on block business is a function of the sum insured and the terms, and those differ between quotes far more than the pricing does. A committee or managing agent putting the cover out to market should fix the specification first and then compare like with like.
Fix the specification before asking for quotes
Take it from the leases: the perils that must be covered, the basis of the sum insured, whose interests must be noted. Add what the building needs: terrorism if lenders expect it, engineering inspection for lifts, employers liability if there are staff, directors cover if a resident company runs it. Send the same specification to everybody.
Compare on six things
The sum insured and the date of the valuation behind it. The peril list against the leases. The property owners liability limit. The excesses, including any separate escape of water or subsidence excess. Whether terrorism is included. And the commission payable to the broker and any managing agent, which should be disclosed.
The sum insured is not a variable to shop on
Quotes that differ on the sum insured are not comparable, and a lower figure does not mean a cheaper policy, it means less cover. Set the figure from a professional reinstatement assessment, tell every insurer the same number, and compare the rate rather than the premium.
What to show the leaseholders
The specification, the quotes on the same basis, the commission disclosure and the recommendation. Leaseholders have statutory rights to see the policy and challenge the charge, and a committee that publishes the comparison in advance almost never has that challenge made.
Questions people ask about block of flats insurance comparison
Should we put the block policy out to market every year?
Every few years at least, and annually if the building is large. A specification sent to several insurers is the only comparison that means anything.
Why do quotes differ so much?
Usually because they are quoting different sums insured, different peril lists or different excesses. Fix the specification first and the comparison becomes real.
Should the broker's commission be disclosed?
Yes. Commission on block business has been under regulatory scrutiny and disclosure is the expected practice.
Can leaseholders see the quotes?
They have statutory rights to a summary of the cover and to inspect the policy and supporting documents, and publishing the comparison in advance heads off most challenges.