Building insurance

Landlords and leaseholders across the country are experiencing soaring insurance costs. After the financial crisis of 2008/9, the insurance sector produced stable and relatively good rates of return on capital. These factors created a stable and favourable environment for insurance buyers for some 15 years. However, insurance premiums have not kept pace with claims inflation and a number of factors have now come together to create a ‘perfect storm’ for insurers resulting in a hardening of the market. Our brokers have informed us that this increase could be attributed to several factors:

• The pandemic, which has incurred costs of over $44 billion (£35 billion) for the insurance industry
• Escalating inflation, with a 19.4% surge in labour and material costs, in contrast to the 3% average in previous years
• The impacts of climate change, amplifying the likelihood and severity of damage from extreme weather events
• Modern Methods of Construction, which are less equipped to resist and endure fires and floods
• Unsustainable loss ratios, where the cost of providing insurance surpasses the premium revenue
• Increasing reinsurance expenses
• The social housing insurance market, has been marked by insurer withdrawals and a more cautious underwriting approach
• Alterations in underwriting methodology, considering overall exposure and potential for substantial losses more extensively

Your 2025-26 building insurance estimate is based on the actual cost from the 2024-25 financial year. A key benefit of our partnership with Hyde is access to the purchasing power of a larger group.

We are actively working with Hyde to secure the best possible deal for residents as part of Hyde’s insurance programme.

The cost of your building insurance is determined based on the estimated cost to rebuild your individual property, rather than the entire block. THCH has partnered with an independent broker to secure an appropriate building insurance policy, which includes coverage for property damage, acts of terrorism, and your liability as a property owner, all while ensuring the lowest possible excess payment.

In addition to your standard building insurance, you may have been charged an 'excess layer premium.' This additional coverage is required because your building is considered higher risk by insurers. We are actively working to reduce these risks, with the goal of lowering future insurance costs and enhancing your building’s safety. All high-risk remediation projects are on track for completion by 2026. Where buildings have required an excess layer, the premium has been allocated to each property by reference to rebuild costs.

If this charge is not included in your personal statement, then it does not apply to you.

The rebuild cost for your property has been assessed by JLL, a firm regulated by the Royal Institution of Chartered Surveyors (RICS), which sets the industry standards for valuations in the UK. Insurance companies use RICS guidance to determine policies and premiums.

The Reinstatement Cost Assessment is a detailed process requiring professional expertise and is based on RICS guidance. For your property and building, multiple factors have been considered, including:

• Procurement & Construction Costs – The cost and time required for rebuilding.
• Shared Costs – The total construction costs are distributed among all properties in your block or location.
• Design & Professional Fees – The assessment includes fees for architects, structural and civil engineers, MEP (mechanical, electrical, and plumbing) engineers, quantity surveyors, and health & safety advisors.

JLL was appointed by THCH to ensure the best value solution for both THCH and its residents, and the cost to procure the services has not been passed on to leaseholders.

THCH uses an established insurance broker, Marsh, to secure the most competitive rate. Marsh was selected as the broker through a competitive tender process in 2018. The contract was renewed in 2023 for a one-year period, and again in 2024 for one-year.

THCH. This expense is not passed onto leaseholders.

No. Sourcing insurance policies is a complicated technical process which an expert broker (Marsh) is required to conduct to ensure that the organisation has the appropriate level of insurance for the risks that it faces.

The main building insurance policy is provided by Protector. You can find the policy here.

The insurance premium was for one year only and therefore a Section 20 is not required.

As per the terms to your lease, THCH (the freeholder) must provide building insurance to your building.

No. Building insurance is covered by a tenant's rent.

Once you receive your charge, if you’re unhappy with the amount, your option is to go through a first-tier tribunal.