How Is Your Insurance Premium Calculated? You probably wonder when you ring around to review your insurance renewal terms why premiums vary so greatly for the same block. Well here's how it is done… Firstly your property information will be requested including: • the blocks construction i.e tile or flat roof, timber or concrete floors, timber frames, listed, modular build. • the age of the building, if a purpose built block of flats or converted from a large house, hotel, mill etc into flats. • occupancy (i.e. whether owner occupied or tenanted)
Often information about the surrounding area will be requested, for example whether you are aware of flooding in the locality or if your adjacent properties have suffered from subsidence.
• whether there are any communal facilities such as tennis courts, gymnasiums, swimming pools, lounges or laundries.
Once the underwriter has collated this information they will normally check the history of the area.
• claims history or "losses" experienced during the previous three years. • rebuilding cost (which will be stated on your current insurance schedule as declared value or sum Insured – (see our Insurance Terms Explained document).
Subject to the block conforming with the Insurer's underwriting criteria most specialist intermediaries will have the authority to apply a "rate" to your reinstatement cost (Declared Value or Sum Insured – see over page for the explanation of these terms) as shown: £1,000,000 (Declared Value/Sum Insured) x 0.080 (example insurance rate) = £800.00 + 12% (current rate) IPT (Insurance Premium Tax) = £880.00. The premium quoted for this block would be £880.00. The variations in premium normally occur because each Insurers rate will be slightly different, dependent on their appetite for that type of business. Variable excess options will normally be offered, for example, the quote above could be with a £100 excess. If the client preferred having no excess the premium would normally increase or could be reduced by requesting a higher excess.
London Flats Insurance is a trading name of Residentsline Limited who are authorised and regulated by the Financial Conduct Authority: FRN 305998. Registered in England & Wales CRN: 03874789. Registered Office: 29 Waterloo Road, Wolverhampton, England, WV1 4DJ.
0207 993 3034 info@londonflatsinsurance.co.uk www.londonflatsinsurance.co.uk