Problems experienced by owners of properties in Blocks of Flats / Joint Freehold

Released  5th November 2007  

Mortgage lenders often pressurise the owners of flats and apartments to take out additional insurance when they are already covered under the block management policy. Neil Cook of Delite insurance who works with jml insurance is very concerned about this practise.

jml works the Delite Insurance Agency from Kent. Neil Cook of Delite Insurance is very concerned about the pressures of Joint freehold and block of flats often experience regarding insurance requirements by lenders. Neil Cook states that "Whilst there is considerable press coverage about banks overcharging I would like to highlight another wrong doing. Banks and lenders agreed some years ago that they would not force borrowers to take out their buildings insurance to secure the mortgage! Although they have used clever marketing to work around this.

The major issue is that they are mis selling buildings insurance to owners of flats I know this from personal experience and from large numbers of clients, the worst case is a gentleman who was in a flat in a block of 8 each had there own policy! He checked the policy and found that although the referral was from the mortgage team to insurance team they had issued him a policy for a 3 bed semi rather than the 1 bed flat he owned, this came to light when he wanted to let his flat as they would not assist.

If at any point he had claimed the policy would not have been worth the paper it was written on."

Neil Cook then went on to say "The Financial Services Authority (FSA) and BIBA (British Insurers Brokers Association) back me! The public need to be informed as the implications are huge"

Dual insurance occurs when a policy holder is paying for two types of cover when they only need one and can also apply when they have been sold cover for building of their individual flat.

The reason this mostly affects flat owners is although blocks of residences can be classed as a single unit and can be covered with just one policy, insurers still offer individual policies for each individual flat.

Typically the freeholder will have a policy covering the whole building and this is usually included in the service charge.

As many as 10 per cent of the population could be affected and possibly more, according to Neil.

Neil Cook explains: "I have been seeing clients with dual cover for around 10 years but up until recently it was only about one case per year. A client who lived in a block of eight flats came to me once and each unit had separate insurance.

"Also when my wife was in the process of re mortgaging she was persuaded to take cover, when she already had it.

"Problems are also arising when a lender knows a building is insured - this will have been clarified before a mortgage was finalised - but still offers a borrower insurance. The crux is they are trying to take money when they don't have to.

"This can be confusing." Eight separate policy holders may be paying between £200 and £300 a year but a freeholder's policy for the whole building may be proportionally half this amount "If the freeholder has not taken out an individual policy to cover the housing block, the first step is to approach them to see if this can be arranged.

"Failing that, residents should club together and form their own resident's association and take out a policy in the name of, for example, 123 The Avenue."

Neil Cook says paying to form a limited company is not necessary; becoming an association will suffice and is free.

"This document must also prove the interest of the freeholder, acknowledging they own the freehold, as a note to whoever owns the property and the names of the lenders.

"This is to show the current insurable legal interest, as insurance is a condition of mortgage."

A key reason residents who do not club together encounter problems is because insurance company computers only recognise a single name for the policy and will not accept multiple names such as Mr Smith, Mrs Jones and Ms French.

Neil says unmarried couples commonly experience difficulty gaining joint policies because of this.

He said: "Modern brokering is very computer focused. If the computer rejects the information, the policy is often rejected too.

"It is typically direct insurers who do not sell covers for blocks of flats but are happy to issue policies for individual units, as these systems are geared towards a single name. Mr/Mrs Smith for example, policies only."

"People just don't realise this is happening. Hopefully they will and action will be taken." Against the wrong doers.

Delite say that they "will gladly help anyone who has been mis sold"  Neil says there is vast confusion and considerable amounts of miss selling involved with this type of property please do not fall into the traps let Delite provide the correct cover and they can be contacted via


Company Information

jml is part of jml Property Services, the trading name of Jeffrey Milner Ltd. The company is an UK based company that was established in 1979. jml insurance acts as an introducer for insurance companies selling property insurance including landlord and tenant rental products, pet insurance like Animal Friends Insurance, wedding insurance, motor insurance, car hire excess insurance, travel insurance and non standard insurance products. They also operate an online marketing service for owners of holiday home property to advertise and are part of the jml Group that includes jml Training and Consultancy

© jml Property Services November 2007


March 2008: Neil Cook now works for Ember JD Insurance Brokers


See also:

Leaseholder’s campaign about insurance commission earned by Block Management Agents continues - May 2009

Now angry leaseholders kick back at the brokers -2nd March 2009        

Leaseholders are concerned by commission earned by Block Management Agents - March 2009


Back to jml Press Releases






Andrew Copeland International Property Insurance logo