What can I do if my landlord fails to insure the building?
You should first check the terms of your lease to establish that it is the landlord who is responsible for...
21 September 2022
Since the Grenfell tragedy leaseholders have been faced with substantially increased costs of insurance. In January 2022, the Secretary of State for Levelling Up, Housing and Communities wrote to the Chief Executives of the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) requesting they review the buildings insurance market for multiple-occupancy residential buildings.
It asked for FCA (in close consultation with the CMA) to review the sector, in order to:
- shed light on the underlying causes of year-on-year price increases; and
- assess the causes of the marked restriction in coverage available for multiple-occupancy buildings.
On 21 September 2022, and following FCA writing to the Secretary of State in May 2022 with its interim findings , the FCA published its Report on insurance for multi-occupancy buildings. The FCA found that there has been a reduction in the supply of insurance for multi-occupancy residential buildings between 2016 and 2021, with some insurers leaving the market and a reduced appetite to take on new business, among others. This appears to be the result of the falling profitability of this line of business. It also identified that the average price of premiums for such buildings has more than doubled over this period (a 125% increase from £6,800 to £15,300).
The package of potential remedies suggested by the FCA, seeking to give leaseholders greater protections and improved information about their insurance costs, included:
- creating a cross industry pool to limit the risk to individual insurers posed by certain buildings affected by flammable cladding or other material fire safety risks, aimed at reducing the price of insurance for these buildings;
- increasing the amount and transparency of information available to leaseholders on the pricing of the insurance they are paying for;
- making it easier for leaseholders to challenge high insurance costs passed on to them; and
- making leaseholders ‘customers’ of buildings insurance.
FCA and CMA noted they did not preclude the opening of a market study into the subjects in the report if they do not see swift action and progress from the industry. A market study could lead to a market investigation referral to the CMA and a significant and detailed investigation into this market.
FCA and CMA will publish an update on the progress of their recommendations in March 2023.
Other information you might find helpful:
- What can I do if my landlord fails to provide information about the insurance cover?
- Template 1 – Letter to landlord asking for insurance summary
- Template 2 – Letter to landlord asking to inspect insurance policy
- Water has leaked into my flat from the flat above and caused damage to my property. What can I do?