Buildings insurance.

PPL, as freeholder, is responsible for insuring the building (clause 4.1). Each Lessee is required under their Lease to pay PPL their share of the insurance premium, computed by reference to their flat’s Rateable Value.

As PPL does not have a large bank balance and in order to avoid having to borrow money, the Lease indicates that the Lessee’s share of the premium should be paid “on demand”. PPL sends out an invoice as soon as the premium has been notified by the insurance broker, which broadly coincides with the renewal of the insurance policy (ie: 3 March).

The current insurance policy states that an excess of £100 will be applicable to each and every claim except where the claim relates to “subsidence, ground heave or land slip” or the  “escape of water”, in which case the excess is increased to £1,000.

The higher excess relating to “escape of water” reflects the fact that most of the insurance claims which have been made in the past resulted from water damage. Agreeing to this higher excess has significantly reduced the premium payable. When this excess was increased from £500 to £1,000, PPL set aside a reserve fund to contribute £500 towards the payment of such excesses as they arose.

If a Lessee believes that there may be a claim payable under the buildings insurance policy, contact should first be made with the Managing Agent.  Advice can then be given as to whether the claim should be pursued. If it is pursued, contact with the insurance company is made via the insurance broker. Once the claim is settled the Managing Agent is also able to decide who should bear the excess and, if appropriate, the extent to which part of the excess should be subsidised by PPL.

There have been cases where an escape of water has originated in a flat at the top of the house and the water has entered into several flats below.  The extent of the damage can on occasions be mitigated if access can be obtained to a damaged flat when the occupant is not there.  It is recommended that this can be avoided by flat owners leaving spare keys (and burglar alarm details, if necessary) with another occupant in the house (eg: the House Representative).

It should be noted that the buildings cover does not extend to terrorism and that occupants are responsible for obtaining their own contents insurance.