FCA issues recommendations on multi-occupancy buildings insurance market reform

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“Since the Grenfell tragedy, hundreds of thousands of leaseholders have had to endure the difficulties of living in buildings with known fire safety issues, and these problems have been made worse by increases in the cost of their insurance,” Sheldon Mills, govt director of customers and competitors on the FCA, mentioned. “We will seek the advice of on measures to enhance transparency for leaseholders in regards to the worth of their insurance and the way leaseholders may be given better safety.

“We expect the insurance industry to work quickly with us and the government to develop solutions to this issue, including developing pooling arrangements and reducing commission, that will make affordable insurance cover more widely available.”

Data from 2016 to 2021 means that the typical worth of premiums for multi-occupancy residential buildings has greater than doubled over this era, posting a 125% enhance from £6,800 to £15,300.

The bundle of potential cures urged by the FCA seeks to present leaseholders better protections and improved details about their insurance prices, in addition to enhance the affordability and availability of insurance.

These recommendations and different potential cures embrace the creation of a cross business pool to restrict the chance to particular person insurers posed by sure buildings affected by flammable cladding or different materials hearth security dangers, aimed toward decreasing the value of insurance for these buildings; the rise within the quantity and transparency of data out there to leaseholders on the pricing of the insurance they’re paying for; making it simpler for leaseholders to problem excessive insurance prices handed on to them; and            making leaseholders ‘customers’ of buildings insurance.

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