Block insurance leak excess £10,000!

Hi Richard
1, There is no way to protect against the excess that I know about. This is a condition of the insurance purchased by the freeholder and it is understandable given prior claims.
2, Recovering costs from another tenant will be difficult. You can only insure your own property. Whoever caused the leak does not insure your property, only you can do that. You may wish to pursue a liability case against another tenant, but that could be costly and the result is not assured. Possibly a legal expenses policy may assist, but only if they feel they have a better than 50% chance of winning.

Reply to the comment left by Jason McClean at 04/09/2019 - 12:25
I think Richard is asking

1. can he buy insurance to cover the excess on the block insurance, should a leak from his flat cause damage to another?

2. Can he claim from his tenant if that tenant is negligent?

Reply to the comment left by Michael Barnes at 04/09/2019 - 15:38
Hi Michael

As far as I know:

1: no, not without bespoke underwriting and large expense.

2: not easily or with any certainty.

Hi Jason

I had similar situations a few times.

when you say in point 2. not easily or with any certainty

why do you think so? if lets say a leaseholder above your flat has a water leak which seeps into your flat and causes say £5000 worth of damage, the bottom leaseholder has these 'very limited' options

make an insurance claim
pay for the damage themselves.

So in that situation i would simply ask a professional (surveyor or maybe even a trade (plumber etc) to visit the upstairs flat and identify where the leak arises from

obtain 2-3 quotes for the works required (both to repair the upstairs flat and to make good the downstairs flat)

invite upstairs flat to pay for the cheapest quote or get their own quotes or make an insurance claim

give say 3 weeks notice to start works

then if no agreement is found do the work and take out a small claims to obtain the lower of insurance excess or works cost from the upstairs flat

in my opinion no court in the land would dispute (after providing evidence by way of a report stating where the leak sprang from) that the top leaseholder should pay for the works.

or am i missing something?

Reply to the comment left by acctsol at 05/09/2019 - 12:26
Hi acctsol

What you describe does not sound easy to me and has no certainty on out-come.

The problem is, the person upstairs does not insure your property. So their insurance will not pay out to cover it unless liability can be determined without any doubt and a claim made on the public liability element. That is likely to be a lengthy and difficult process; because the first answer will be the upstairs owner has no liability to cover the downstairs flat. Not easy, but if you can prove liability, then you may get it paid out, but I would suspect it will be months rather than weeks before it is resolved.

You can try in the courts, but if the upstairs insurer is saying no liability, why would a judge say anything different? It will be the first line of defence for the upstairs property. And there are costs involved in courts...

Hope this helps! Best thing is to have your own insurance and claim on that. £10k excess tells me it is a regular occurrence and insurers are not keen to touch it without a big excess to reduce losses. Put pressure on the freeholder to shop around for better block of flats insurance would be my next move.

Hi Jason, i think i was unclear. The block has one insurance for the entire block (the freeholders insurance). the claim would be directly against the leaseholder upstairs (the liability is clear in my opinion, the water emanated from his pipework contained in his flat).

i can't see how any county court judge would disagree that the liability (even if not negligent/careless or otherwise) should not sit with the property of whom pipework belongs)

but obviously willing to hear opinions

Hi acctsol

Yes, what you are looking for is the ability to claim the £10k excess from the upstairs property. Sounds fair, however, placing liability on them will not be easy unless they simply accept it.

You will need to take a personal legal action against them to reclaim the excess I suspect.

correct, the lesser of the 10K excess or actual costs of works through a claim between leaseholders, in this case the bottom flat suing the top flat.

placing liability is a slam dunk (in my opinion) if you have a surveyor report/several quotes from trade people stating where the leak emanates from? why should it not be easy?

Lease Advice states (copy/pasted from their site):-
Most leases do not create directly enforceable contractual relationships between the leaseholders making it difficult to take action against another flat owner.
To deal with this problem most leases usually have provisions enabling a leaseholder to ask the landlord to enforce covenants broken by other leaseholders. If the leaseholder fails to carry out the repairs the landlord will have the ability to take legal action to force compliance.
The drawback with this type of provision is that the leaseholder seeking the enforcement will have to cover the landlord’s costs of any legal action required to remedy the situation.
Once the leak has been stopped if there is damage to your flat you should ask the neighbour responsible to cover the cost of the repairs. If negotiating with your neighbour does not resolve the problem you could consider mediation as a means of trying to resolve the matters amicably. As a last resort you may have no option but to commence a claim in the Small Claims Court for damages. (Specialist legal advice should be sought before an action is commenced in court).

The whole point about insurance is to reduce the possibility of having to pay out large amounts in the event of a large loss. I did have a number of water claims and the excess slowly increased to £1000. We therefore inserted the following in our rules:
17. Insurance claims:
All leaseholders have the legal responsibility to ensure that damage and costs are minimised therefore immediate action, if necessary, should be taken e.g. turn off water at the stop cock if it is a water leak. Stop cocks are under the sink, in the services cupboard on the ground floor and the pavement outside the flats.
Contact the Property Manager who will advise of any further action and how any insurance claim will be handled.
The liability for the cost is that of the leaseholder of the flat, where the original problem occurred. Excesses are currently £100 in most cases but £1000 for damage caused by water, or where the flat is unfurnished for more than 30 days. The directors have agreed that a cap of £250 will be applied and that the Management Company will pay the remainder, which will be collected as part of the annual service charge. Where the Property Manager, however, deems that the leaseholder or tenant of the flat where the original problem occurred was negligent or, in some way, at fault in causing the problem, the leaseholder concerned will indemnify the management company for the full cost of the excess. In the event of a dispute about the Property Manager’s decision, the matter will be determined by the directors and their decision will be binding on all parties.
If the flat is empty then all leaseholders do have the responsibility to regularly check the property. Failure to do this may result in an increased excess or non-payment of the claim.

Hope this helps