“There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” Woody Allen
Although building insurance can be quite a dry topic with insurance companies being seen as a means to an end (much like property managers), it is an important and typically expensive element of a service charge budget.
Related: How to get the most from your Property Management Company
We have been asked many times for any tips and tricks to reduce the building insurance premium and it has led me to compile the below list that property managers and resident management companies/leaseholders can use to reduce and manage the building insurance:
Shop around – we do not expect any client to accept the first and only quote received so make sure your property manager or person responsible for the insurance is getting at least 3 quotes, it’s a big market so make sure you use it to your advantage.
Finding the true value – when commencing management of a property, we always suggest that a full insurance valuation is completed if it hasn’t been recently. Insurance reduces financial impact on the policy holder should a risk occur and the last situation you would want is to find out that the policy is underinsured. You may be surprised by the outcome.
Increase your excess – the typical risks on a building insurance policy are: escape of water, fire/lightning, explosion, subsidence, and accidental damage. If insurance claims have become a regular event in the building, discussing the possibility of increasing the insurance excesses may bring the overall premium down and warn off consistent claimers.
Proactivity – building insurance tends to become a hot topic when claims become a regular occurrence. More often than not, these claims are attributed to water leaks throughout the building. We would suggest that a proactive maintenance plan may help prevent further issues from arising. The damage may already be done with increased claims leading to increased premiums but proactivity can reduce premiums over time.
How do you pay – most property managers are in a position to organise credit for their clients who can then pay premiums monthly, however, this can increase your annual cost by up to 10% in some cases. It is financially prudent to manage the service charge accurately to pay for the building insurance in one annual payment.
Strangford Management has access to the entire market, providing our clients with the best insurance policy for the year ahead.