Princes Risborough, United Kingdom (PressExposure) March 03, 2009 -- Neil Cook an Insurance broker is now working for Ember JD Insurance Brokers and jml Insurance.co.uk have recently started introducing various Ember products on their website.
One of these products is insurance for Blocks of Flats. Neil Cook has a lot of concerns about the fact that Flat owners could be paying up to double the best rates for buildings cover, thanks to hidden commission being shared out between brokers and managing agents.
Neil was interviewed by Jamie Elliott for an article in The Observer on the 1st March entitled "Now angry leaseholders kick back at the brokers"
It appears that owners of leasehold flats are paying up to double the market rate for buildings insurance because brokers are paying "kickbacks" to the block management property agents who manage their homes.
Some insurance brokers are choosing the insurer that pays the most commission, instead of the company that offers the best value - and then sharing this commission with the managing agent.
The report goes on to say that Insurers who pay the most commission are often also those who charge the highest premiums. Although leaseholders bear the extra cost, they rarely find out about the inducements because there may not be an invoice and the inducements do not appear on their service charge statement or other documents.
This must be normal as a representative from jm-insurance.co.uk advised that with flats their company are involved with they have absolutely no idea who the insurance company used are as the block management companies involved just send out an annual request for ground rent service charges and insurance and the item insurance would just be mentioned in the annual accounts.
Neil Cook, of Ember JD Insurance Brokers, has been approached by an increasing numbers of leaseholders who are being charged significantly above the going rate. Neil said "I see a lot of inflated premiums for blocks of flats where it just doesn't add up, and there is no way the broker has sought the best deal," he says. "Sometimes it is as much as double but, typically, the premium is about 30% above what you would expect to pay."
There obviously is a problem with this situation and Philip Suter of jml insurance.co.uk who has been in the property business for over 25 years said" Leaseholders should ask their block management agents for details of the insurance if they feel the amounts are excessive. Normally block management agents will provide copies of quotes for re-decoration, carpeting and other repairs for the individual leaseholders so there shouldn't be a reason why they can't be provided with insurance information."
Philip went onto say "If you are not happy with the Block Management agent, get together with other leaseholders and the elected Directors of the block's company and appoint new agents. Most blocks of flats have a residents company that the agents actually work for and the Directors are usually some of the leaseholders."
"Most block management agents in my experience do not necessarily charge very high management fees for the amount of work they carry out during the course of the year so this is why they are probably trying to gain additional revenue from the insurance policies they arrange for the various leaseholders"