The insurance market is failing some tenants who live in blocks of floors due to raw premiums after the tragedy of the Grenfell Tower, said the Secretary of Housing. As a result, Michael Gove has asked the UK financial regulator to review the building insurance market. He said despite the progress to eliminate dangerous coating, premiums increased dramatically. Some tenants had seen the insurance costs more than double, he added. Mr. Govve warned that the lack of new policies offered by the insurers was forcing people to buy in a limited market and in many cases, trapping people with their current provider.
He said that despite the progress in the elimination of dangerous coatings, insurance premiums increased dramatically for almost all tenants in floors. Understandably, many of the insured do not see the market effectively that offers accessible price insurance, widely available, he said. The Lord. The Executive Director of the FCA, Nikhil Rathi, said that the regulator would remind companies of their obligations under our rules, which include that insurers should consider the costs transmitted by tenants when determining whether a product is a reasonable value. This is especially important, since most tenant rentals pay for buildings insurance through service charges, and can not buy to find the best deals, he said.
Following the fire of Grenfell, which killed 72 people in 2017, the flammable coating and other fire safety defects have been discovered in hundreds of floors of flats throughout the United Kingdom. Eliminating the coating can cost millions of pounds per block, with the cost that often conducts individual owners, under the leasing system in England and Wales. He has left many with great invoices to fix unsafe houses. He said that companies that manufactured fuel coatings and isolation must now pay, instead of tenants. Recent figures show almost five years after the fire of the Grenfell Tower, 40% of buildings in England with the same type of coating have not been made safe.
The Lord. The FCA said that a key factor in the price of insurance policies was the evaluation of risk insurers, which said it was affected by the unsafe coating. He also added that there was a greater understanding of the probable scale of the claims associated with the flats affected by the construction of defects. For example, where in the past, a fire event may have been seen as a risk for only one single unit or its adjacent properties, now it is understood that unsafe construction practices can lead to significantly higher damage, more claims events. We want to make sure that the products provide fair value, and the premiums reflect fairly and accurate the risk.
The FCA has been asked to provide feedback within three months, with a final report in six months.