Coping with the Increase in Insurance

As the owner of a block of flats you have a lot of responsibility on your shoulders. Finding the right insurance cover is one of them. Companies like Deacon Insurance specialise in providing insurance for a variety of properties, including blocks of flats and buildings oof multiple occupancies. As you make decisions that will be for the benefit of your building, and your profit, there are multiple things that you need to take into consideration.

What Does Building Insurance Cover?

 What exactly will building insurance cover for you? Building Insurance usually covers any loss caused or damage done to the property in various situations. These can range from fires and explosions to natural disasters like floods, storms, and earthquakes. If there is damage because of theft, attempted theft, or vandalism, this is often covered too, as well as building faults such as frozen or broken pipes. Ideally, you want to look for a policy that will support you in all these eventualities. It is vital that you get the building cover and replacement value right as if you don’t, you’ll be left face-to-face with a massively high shortfall in the event of a claim being made.

Prices are Going Up

 Inflation is mercilessly hitting every industry going and the insurance market is just one of the casualties. The staggering rise in price inflation and shortages is having a massive impact on the availability and cost efficiency of building supplies. This now leaves property owners with the potential risk of being underinsured and thus subject to a condition written in every policy, known as “averaging”, if they were to make a claim.

How to Mitigate the Issues

 Even though we live in an unpredictable world and operate in an ever-fluctuating market, there are things that can be done to help. There are a few block management issues that you can be prepared for so that you can keep your premium expense from breaking the bank.

  • Keep an eye on rebuilding and repairing costs. Ensure the property is insured for the right amount from the get-go, and from then on considering having revaluations done to make sure there is no risk of becoming underinsured. Claims big and small will be affected if the building were to be underinsured so it’s vital to keep your policy up to date and match the increasing rebuilding and repair costs. Just to illustrate this point, take for example the rising costs of commodities such as iron and copper. These increases have been seen globally, as iron ore prices skyrocketed by 97% between 2020 and 2021. Not only is the global demand increasing which causes increasing prices in inputs, but disruptions to the global supply chain are also having a negative e impact on the availability of construction materials, thereby also increasing the price.
  • Don’t make as many claims. We’re all familiar with how a no claims bonus affects your car insurance and building insurance works much the same way. By finding a way to reduce the claims you make, you will make yourself a lower risk and this more attractive to insurers. Prevention is better than a cure, so encourage your tenants to do regular maintenance checks and to take precautions. Leaks and overflows are relatively easy to avoid and if you can monitor these issues before they develop into bigger problems, there will be less claims to make and less premium to pay.
  • Just pay for what you need. Do your best to avoid paying cover for things you don’t need. Get your money’s worth when it comes to hiring an insurance broker and get them to find a policy that reflects the needs of your property.

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