Buildings Insurance cover is one of the most important subjects any homeowner must consider, and for most flats and apartments it will typically be one of the larger areas of expenditure.
HPMS appoint AON, an internationally recognised, leading insurance broker, to ensure that our customers receive an excellent level of service and the most appropriate cover, at competitive rates.
A question our customers often ask is; how is my insurance premium calculated?
The insurance premium for most flatted property is calculated as follows;
- Sum Insured x Insurance Rate + Insurance Premium Tax
Therefore, these are 3 factors which can influence the cost you pay.
Insurance Premium Tax is set by the UK Government and has increased to 12% in recent years.
The Sum Insured is the amount of cover the insurer provides for your property and should provide for the “worst case scenario”. If there was a major incident; a fire, storm damage or if a major structural defect occurs, your Sum Insured should be sufficient for full reinstatement of your building.
It is important homeowners set their Sum Insured at an appropriate level. Too low and you risk a claim not being paid in full, too high and you might not be paying the right premium.
So, how do you know if your Sum Insured is at the right level?
The best way to keep your building insured at the right level is to have regular valuations carried out by a building surveyor. A surveyor will consider the construction of your building, it’s size and other relevant aspects to determine the recommended Sum Insured, to allow for reinstatement and repairs if there is a major incident affecting your building.
If there is a significant change in material costs, labour costs or energy costs, this can have a significant impact on the cost of construction, repairs and maintenance and this has a knock-on effect on the required Sum Insured for your building.
Many of our customers already instruct us to carry out regular building insurance valuations to satisfy themselves that the insured value is correct and will be enough in the event of a claim.
If you have not had a valuation carried out recently, each year the Insurer will index-link your Sum Insured to try and ensure that your level of cover does not fall too low. This is not an exact exercise, and it is recommended that you ask a Building Surveyor to review your Sum Insured on a regular basis by carrying out an Insurance Reinstatement Valuation.
If you would like to arrange for a revaluation of your building’s Sum Insured to be carried out, please get in touch with your local Property Factoring Team and we will be happy to help.
Are insurance premiums increasing?
If your insurance premium has increased in recent years, the main reason is likely due to the Sum Insured increasing through index linking each year.
This is influenced by the construction market, and therefore the wider economy too, with building costs experiencing consistent increases in recent years.
Ongoing supply chain pressures continue to impact building costs and whilst AON have successfully restricted increases to premium rates for many years, and negotiated lower rates for our customers in 2023-2024, inflation currently remains around 10%, resulting in the sum insured for buildings increasing and premiums reflecting this increased sum insured.
2023 Insurance Renewal for HPMS customers
Despite general market conditions hardening and most similar policies continuing to experience annual increases, in 2023 HPMS customers will benefit from another successful renewal, with most of our customers seeing a drop in their insurance premium rate.
You can find out more about this here – Building Insurance Renewal 2023
If you are unsure how your insurance is currently arranged, if you have been experiencing any problems or if you would just like some more information on how we can help you arrange your insurance please contact your local Property Factoring Team who will be pleased to assist you.
