Landlords alerted over excess payment of building insurance

Posted under General by Michael

A customer friendly insurance broker has a word of advice for landlords possessing portfolios that contain blocks of flats and they may be overpaying for insurance without being aware of it.

Neil Cook, a broker employed at Ember JD Insurance, has cautioned about activities of certain brokers and managing agents. According to him some hidden commission charges are being collected by both at the expense of landlords.

In an article in the daily Observer, Cook revealed that some property owners are paying double the amount for building insurance as property agents are being paid kickbacks by the brokers.

His allegation is that insurance brokers are funding backhanders for providing an insurer that pays higher commission, instead of a company which offers best value.

Landlords remain unaware of their losses since they do not know which company is insuring their properties.

Normally management companies send “insurance and ground rent service charges” request on annual basis without giving finer details of commission paid on insurance.

Cook states that premiums for blocks are inflated and some times it is almost doubled, but, typically, the premium is charged 30% more than normal. The broker no way seeks the best deal.

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