Cladding victims hit with 1,200% insurance hikes Owners cry foul as freeholders rake in huge commissions
JUSTICE CLADDING VICTIMS
CRIPPLING insurance bills sent to cladding victims are loaded with “secret” commissions to freeholders, agents and brokers.
The Sunday Mirror can reveal hefty payments are often hidden in annual renewal demands – and some have risen 1,200 per cent.
Since the Grenfell Tower fire, which claimed 72 lives in 2017, some four million flats are caught up in the cladding and safety crisis.
High-rises which passed regulations are being re-inspected and leaseholders fear receiving typical bills of £40,000 for repairs not covered by the freeholder, the developer or a government fund.
PM Boris Johnson has promised leaseholders will be protected from massive bills and an announcement is expected within weeks.
Meanwhile, insurance has rocketed on thousands of towers after unsafe materials were found.
Freeholders or managing agents typically arrange the insurance and one industry expert told the Sunday Mirror commissions can bump up premiums by 25-50%.
Sir Peter Bottomley last night led calls for the practice to be investigated. The Tory MP for Worthing said: “Unfair service charges cost leaseholders hundreds of millions of pounds each year, with secret commissions on buildings insurance deals making up a large part of it. Regulators must do more to
FOR bring to an end practices that unfairly impact leaseholders.”
Neil Holloway, founder of M2Recovery, has reclaimed millions from managing agents and freeholders in the past three years.
He is currently dealing with a case in North London where the agents’ commission soared from £9,000 to £40,000.
Mr Holloway said: “Leaseholders come to me with huge premiums that are not competitive and they can’t understand why. Often it’s because there are lucrative commissions that inflate the price.”
Leaseholders in a fire-risk highrise in Leeds questioned why their insurance had shot up to more than £1,000 per flat. They were then accidentally sent an email detailing a 43% commission share between the broker and the building’s owner.
A property tribunal can rule whether insurance costs are reasonable – but bringing a case is costly.
The British Insurance Brokers Association said members aimed to get the “best deals possible for clients”. A spokesman said: “This is an incredibly difficult time. Brokers will do all they can to give clients as many options as possible but it is the insurer that sets the premiums.”
The Association of British Insurers said premiums reflected the increased risk but added: “We understand the difficulties and stress leaseholders are facing.”