£4k to insure a 3 bed flat. nightmare

[ThinkAboutItTomorrow]

My parents retired to a flat in 2008. The flat is by a river but wasn't considered to be in a flood area as it hadn't flooded in 100 years.

In 2012 it did flood. Total devastation, my elderly (by then widowed) mother was rescued by a fire boat with her cats in a carrier bag. Everything in her ground floor flat was destroyed, lots of memories etc.

It took 4 months to dry out, strip and rebuild the flat.

It has been nearly impossible to get insurance and this year they are quoting £50k. As a block of flats that works out at £4k each. This is double last year. With a £35k excess.

Because it is a block the freeholder legally has to get insurance (& to be fair my mum needs the insurance) and puts it onto the leaseholder management charge.

The management charge is therefore going from £1500 when she moved in to £7000.

Floodre which comes in soon is the government's much heralded scheme to ensure affordable insurance is possible for households at risk of flooding. But it doesn't cover blocks of flats which seems so bloody unfair. I can't think why not. It feels as though floodre is making it worse for those at risk but not covered as the premium is going up so much it seems they are subsidising the rest of the floodre scheme.
AIBU to think that flats should be covered if other households are?

And anyone have any ideas what we can do? Even walking away she is still liable for the management fee. We can let it out but the letting value wouldn't cover the costs.

[BarbarianMum]

Sounds awful but I don't know what you can do about it other than check that the management company has shopped around for the best possible deal. And lobby your MP/the Government to amend the scheme.

[ThinkAboutItTomorrow]

No one else will even quote. I get that they need to make money so don't really blame the insurers it's just that the scheme seems so arbitrary in not covering blocks of flats.

[ThinkAboutItTomorrow]

And it's even been mentioned in parliament. The government admits it's a gap but aren't doing anything.

[Collaborate]

But as a society we all accept that insurance companies should factor risk in to policy premiums. We accept it with car insurance and life insurance. This is no different.

[specialsubject]

I'm really sorry but there is nothing to be done. Climate change, building in stupid places, insane farming policies which remove trees and lots of tarmac/concrete mean that more places will now flood.

everyone will be contributing to floodre through hiked premiums. Be aware it doesn't cover rentals either so that doesn't help you.

it may well flood again, and of course will have lost value.

there are things to be done to reduce likelihood of flooding - stopping building on flood plains, refusing permission to concrete/tarmac, changing systems to discourage removal of trees/hedgerows...but the endless pursuit of growth means no-one will do it.

[HermioneJeanGranger]

There's not much to be done about it, really. It's really unfair but she needs insurance. Paying 7k/year is cheaper than buying to re-fit and replace everything in the flat.

Is there really no way for her to move?

[Adeleslostbeehive]

Of course things can be done. Start lobbying petitioning and harassing your MP and anyone else who will listen to include flats. That's how floodre and about in the first place.

And how is she going to sell it? Who would want to buy a flat that will cost them that much to insure?

[gabsdot]

Will the upstairs flats that didn't flood have to pay that much too. That's very unfair for them
I feel for your mum and sadly she's by far the only home owner in this position. I don't know what the solution is.

[livingintheNL]

TBH for the things you get stung for being a leaseholder, this is pretty minor.

My ex had to pay 15k for the exteria painting on his studio a few years ago.

[Adeleslostbeehive]

Generally all the flats will pay. There isn't anything to insist that's the case (in law for example) but very few management companies won't divide it equally. You buy a flat, you share the costs of the block.

[Adeleslostbeehive]

NL this isn't a one off like
Maintenance. OPs mum will pay this every year. Over £500 a month. I suppose it's easy to be dismissive when is not you!

[ThinkAboutItTomorrow]

No one will buy it, even at half what my mum paid. I suspect with fees of £600 per month and a rental value of £650 no one will really want it at any price.

I'm buying somewhere else for her to live but she is still liable for the management fee.

I get that insurers need to factor in risk, fair enough and in many ways I'm crying 'it's not fair' to the universe more than anyone in particular.

But the government have put in place a solution to mitigate the cost for people who live in houses. Just not those who live in blocks of flats. That is unfair.

[ThinkAboutItTomorrow]

Yes all the flats take the hit. Some are in any even worse position as they have mortgages in negative equity and a clause saying they have to have insurance in place.

[BarbarianMum]

OK, well if you are buying her somewhere to live then moving her, letting the flat and using the rent to cover the insurance may be the best you can do - other than hope for/lobby for floodre to cover flats.

Not ideal but at least your mum will be safe.

[BarbarianMum]

No it isn't. Flooding will affect communal areas too and it is no different than everyone contributing to fixing the roof (just more expensive). Atleast they aren't having their homes destroyed each time the river floods.

[OurBlanche]

Are there other buildings close by in the same predicament?

They could get together and underwrite themselves, possibly. I know it has been done in Tewkesbury. It may be worth talking to an insurance broker about the possibilities.

[HeadDreamer]

What does she own? Assuming there is no value left in the flat, would it be cheaper if she goes bankrupt?

[MrsBethel]

Try a few different insurance brokers (you'll cover more of the providers that way), and try someone who has access to Lloyd's.

The broker gets to keep something like 10% of the premium, so if a new one can come in and do it for £25k, it'll be a win-win.

[ThinkAboutItTomorrow]

Bankruptcy is a thought. It would break her heart though at 75. I'm close to needing power of attorney because she can't cope as it is.

Also bankruptcy seems harsh for the other owners. What happens if she goes bankrupt? The flat lies empty and the others have to split the cost between them?

Unless they could auction it I suppose. But not sure why anyone would want it.

[Adeleslostbeehive]

No whomever owns the flat upon bankruptcy should pay it- probably the bank if she has a decent sized mortgage?

[ThinkAboutItTomorrow]

We've tried all of the flood specialist brokers and no one will quote. The current insurer is quoting under sufferance because they have to and can't leave us uninsured. But by doubling the premium they are basically trying to get us not to insure.

[BarbarianMum]

Well it would be more sensible to try and auction it yourself before opting for bankrupcy surely?

[ThinkAboutItTomorrow]

No mortgage. They downsized and bought outright. That's why suddenly trying to find £7k a year,especially now my dad's died and his pension has gone, is nigh on impossible

[ThinkAboutItTomorrow]

Only one other house impacted to underwriting unlikely but worth a try. I'll see if I can find out more about it.
Thanks.

[Adeleslostbeehive]

Oh dear. In that case she doesn't really have any way to go bankrupt :( all she could do would be agree to the insurance then not pay it and go bankrupt for that debt but seems a bit silly
How about if you buy her a new place, rent her flat out. In the longer term the insurance position might improve