Block management firm LRPM London has warned that outdated insurance valuations could be leaving leaseholders paying thousands of pounds more than necessary in buildings insurance premiums.
The company says inaccurate rebuild valuations, particularly in older or heritage buildings, are continuing to inflate insurance costs for residents where cover has not been properly reassessed for several years.
The warning follows a recent case in which LRPM helped residents at a Grade II* listed estate reduce their annual insurance premium by £16,000 after commissioning a fresh rebuild cost assessment.
According to the firm, the 19th-century property had been insured for years based on a rebuild valuation of around £37,000, almost double the figure identified by specialist surveyors following a detailed reassessment.
DISTORTED BUDGETING
LRPM said the incorrect valuation had not only increased annual premiums but also distorted long-term budgeting for residents, with the cumulative excess potentially exceeding £100,000 over several years.
The revised valuation has now reduced annual costs and freed up funds that can instead be directed towards maintenance and management of the building.
Letitia Randell (main picture, inset), Founder of LRPM, says: “Buildings insurance is one of the biggest shared costs residents in blocks face, so it is important that the figures it is based on are accurate.
“For heritage buildings in particular, valuations need to be handled carefully. They must reflect the real cost of reinstating the building, but they also need to be regularly reviewed so residents are not left paying premiums based on outdated or inaccurate assumptions.”
USEFUL REMINDER
Randell says the issue is particularly relevant as insurance costs remain under pressure across the residential block management sector, with many leaseholders already facing rising service charges and wider building safety costs.
She adds: “This is a useful reminder for leaseholders and residents’ groups to ask when their building was last properly assessed, who carried out the valuation, and whether the insurance figure still reflects the property as it stands today.”
