Gove requests review of spiralling insurance for flats with unsafe cladding
A review of the “crippling” insurance costs faced by residents in some buildings with unsafe cladding is to be undertaken by a watchdog, at the request of the government.
Michael Gove, the communities minister, has asked the Financial Conduct Authority (FCA) to establish within six months why insurance premiums have shot up for many customers while work started after the Grenfell tragedy to remove cladding from many sites.
Despite investment and work to identify and tackle cladding safety defects in existing blocks and a continuing decrease in the instances of fire in multiple-occupancy buildings, he said building insurance premiums had increased dramatically for almost all leaseholders in blocks of flats.
“I am also concerned to hear that many insurers seem unwilling to offer new policies, forcing people to shop in a more limited marketplace with more restrictive terms or less coverage; in many cases, trapping people with their current provider,” Gove wrote in a letter to the Financial Conduct Authority’s chief executive, Nikhil Rathi.
The minister said he shared the view of many policyholders who, “understandably”, do not view the market as effectively delivering accessibly priced, widely available insurance.
“The market lacks transparency and there is not currently useful data to explain the rationale behind the increasing premiums charged by insurers and the conditions associated with the cover. The role and remuneration of brokers, managing agents and freeholders is also unclear.”
A government review into building regulations after the fire – which killed 72 people and injured more than 70 – concluded that indifference and ignorance led to a “race to the bottom” in building safety practices, with cost prioritised over
Read more on theguardian.com
