to say we need insurance?

[ThinkAboutItTomorrow]

I have posted about the problem getting insurance for my mums flat before but really need to know if I am being stupid or unreasonable here.

Long story short, following a flood in 2012 the insurance of my mum's apartment block went from £8k a year to £26k. This year they have raised it to £51k. The excess is £40k or 30% of the claim, whichever is higher.

Across the flats this raises the management fee to £7k. In 2011 it was £1.2k.

There are 3 ground floor flats which were badly flooded, my mum lost almost everything and was in temporary accommodation for 5 months while it was fixed. It cost £60k to repair her flat. As part of the overall claim of £260k.

The other 9 flats are now saying they want to forgo flood insurance as they just can't afford it and the excess is so punitive it's hardly worth it.

My mum is 75 and in poor health and on a pension.

AIBU to say we need insurance even at such a price because for the ground floor even 70% of the repair bill covered is better than being left homeless

It's ok for those on higher floors to feel the risk is worth taking!

[CocktailQueen]

Do you have to take out insurance via the service charge? Can't you arrange your own? Yes, I'd say you do need it.

[ThinkAboutItTomorrow]

At the moment the freeholder is legally obliged to get insurance. To forgo it there would have to be a change to the contract that they would all need to support.

Individual insurance is impossible as no one else will quote. They basically don't want the business which is why it is sky high.

[TheGreenNinja]

We had trouble getting insurance a year ago for a house we were buying which was at high risk of flooding. (We pulled out) At the time, the seller and estate agent were talking about flood re - a new rule which was due to come into effect last summer which caps the amount of premium which can be charged for flood risk (to around £500ish, iirc), specifically designed to stop situations like this where people are priced out of insurance because of previous floods or risk of flooding.
Can you look into that and check whether it has come into force yet? And if so, why are the premiums so high?

[ThinkAboutItTomorrow]

Flood Re comes into force this year but doesn't cover flats. It's a huge mistake. I think that's why the cost has gone up so much this year for those left out of FloodRe.

[TheGreenNinja]

That's utterly ridiculous then! But what does the freeholder say, surely it's in their interests to have insurance that covers the building as they'd be the one footing the bill if it's not covered? I looked at the floodRe site, it says it would cover tenants contents in residential flats but not buildings.

[ThinkAboutItTomorrow]

The plan would be to sign something stating they wouldn't hold him responsible for flood damage but if the ground floor isn't covered it will be left vacant and flood damaged, stinking the place out, so I can't see him being happy with that.

[Theoretician]

So insurance would cost 51K a year. If instead that amount of money were saved, it would take about five years to cover the cost of repairing ground floor flats. Presumably floods are going to happen less often than once in five years, so self-insurance may be the way forward.

I presume if there were no insurance and no reserves the free-holder would have to pay out-of-pocket, so everyone could face a 20K bill repair bill in a year when there was a flood.

Why would the owner of a ground-floor flat let the freeholder off repairing flood damage?

[ThinkAboutItTomorrow]

If that was the plan theoretician I would be more supportive. But I don't believe the other leaseholders will pay the money into a sinking fund. They just want lower costs to them.

'Why would a ground floor flat let him off flood repairs'? That's exactly my point I don't think we should.