Introduction - The term
“Blocks of Flats” can relate to a number of different types of property, all
sharing the common theme, being they are occupied as “MDUs” or multiple dwelling
units. There are two main groups of property under the block of flats
umbrella; purpose built and conversions. Both can be insured under a blocks of
flats policy but some insurers approach the buildings in a different manner.
Purpose Built - purpose
built blocks have been in existing for over a hundred years, although building
techniques have changed a good deal in this time. Some of the earliest purpose
built blocks were in Scotland and known as “Tenement blocks”. These solidly
constructed properties, built of mainly sandstone & granite are today home to a
broad spectrum of society. Most insurance companies prefer purpose built blocks
of flats, with their concrete floors and stairs acting as a natural firebreak,
this helps to keep the cost of claims down. However, this type of construction
is not without its problems from an insurance perspective. Many tower blocks,
now in private ownership, were to be fair, not constructed using the best
materials and on many occasions the design and construction is of poor quality.
These properties often suffer from water peril claims, with minor water leaks
from old pipes being the main culprit. Insurers frequently receive claims for
damage to ceilings and walls, where water has leaked from a flat above. As well
as escape of water from pipes etc, it is surprising the number of claims that
arise, simply because people leave taps running.
One of the most important and
often hard to answer questions when requesting an insurance quotation for a
purpose built of block of flats relates to the construction of the roofing
material. Most small new build blocks are now constricted with tiles & pitched
roofs. However, older style buildings are often built with entirely flat roofs
and these are mainly constructed on concrete of felt on timber. It’s important
to enquiry as to the construction of the roof as many insurance companies are
not overly keen on roofs that are entirely flat. Certainly, it is quite common
for policies to contain a flat roof warranty. The purpose of the flat roof
warranty is to ensure that the roof is kept in a serviceable condition
Flat roof warranties do vary
from one insurance company to another, but the following is fairly typical.
Remember, when buying insurance, its important to check both the Keyfacts and
policy document as soon as possible so as you are fully aware of not only the
cover afforded but your own obligations under the contract.
It is a condition precedent to
liability that the roof be of excellent repair and a further condition precedent
to liability in respect of damage by storm, tempest and flood, that any flat
felted roof portion of the within the property insured, shall have been
inspected at least once every two years by a qualified builder or property
surveyor and any defects brought to light by that inspection shall be repaired
immediately.
This warranty mentions the
period, two years, however, some insurance companies are prepared to allow up to
ten years between inspections. It must be remembered though; the average life of
a flat roof is ten years.
Because Purpose built blocks of
flats tend to be on the large side, they have other insurances that need to be
considered. These include insurance for the lifts. If the property has a lift,
then there is statutory requirement to have it inspected at regular intervals,
this type of work is often undertaken by an insurance company and the cover can
be extended to cover breakdown & sudden & unforeseen damage.
Conversions - the term
conversions, mainly relates to converted houses although in recent years, there
has been a fashion to convert former industrial premises in to luxury flats and
apartments. In the main, this type of property tends to have lower sums insured
and many insurance companies do not offer such attractive rates because the
floors are almost always made of wood. However, that said, there are a number of
insurance companies that specialise in this field and premiums can be just as
competitive as those available for purpose built blocks of flats
One of the main problems, when
insuring a whole property as a block is arriving at the correct sum insured.
Many people make the mistake of simply adding up the individual flat values but
this is not the correct method. The Association of British insurers do publish a
guide to rebuilding costs but one of the first you will notice is that it
clearly states “not to be used for blocks of flats”. However, with regard to
conversions, a very ball park amount can be obtained but calculating the price
as if the property was still a single dwelling, then adding on an amount for the
conversion (In essence, extra plumbing, wiring, partitioning & sound
insulation).There are a number of websites that comment on how much it costs to
convert a property in to flats and whilst this method should not be totally
relied on, it can give you an approximate idea. The only true way to calculate a
sum insured is by contacting a local surveyor and requesting a valuation for
insurance purposes. The fee can be split between all the flats and doesn’t need
to be as comprehensive as a full structural survey. If you are taking on a block
for the first time, this will help insure, you can be confident that the first
time you insure the property, the sum insured will be adequate.
