while insuring an apartment in a block, be familiar with under

Local Link Up - Contentys Ltd The Building Cost Information Service (BCIS) warns insurers that buildings insurance arranged for individual flats carries a significant risk of underinsurance. Commonly, buildings insurance is taken out on the whole block by the freeholder of the house as well as premium split between the various leaseholders. Unfortunately, for a variety of reasons, this is not always the case and individual leaseholders are left to arrange their own cover. Leaseholders who take out buildings insurance for their individual flat believe, in the event of a catastrophe, they will be protected and covered for the building to be restored to its original state. Unfortunately, unless all leaseholders in the block have adequate buildings insurance cover, this isn't the case. BCIS warns that if there were to be a total loss and not all the flats were insured, there can be a distinct possibility that the block could not be rebuilt. In such a case, the insured leaseholders would receive a cash settlement from their insurer but the settlement would be equal to the rebuilding cost of the person flat and this, in many areas of the country, will be far short of the market value. The risk doesn't only apply to total losses. If damage occurred to a common part such as the roof or foundations, the insurers of each flat would look to split the cost of the claim between them. If a number of the flats were uninsured, the insurers of the remaining flats might not be willing in order to satisfy the full cost of the claim, leaving the uninsured leaseholders to fund their part of the work themselves. However, those that are not insured may not have the means to cover the cost of the repairs themselves. Andrew Thompson, BCIS Director, comments: "This is known as a serious issue and could lead to a significant financial loss for the policyholder, not to mention the reputation and commercial risk for the broker or insurer. In a total loss situation, policyholders may receive a payout far short of the market value of their flat but they would still need to continue to pay their mortgage." BCIS is the Building Cost Information Service of the Royal Institution of Chartered Surveyors (RICS) and also the UK's leading independent expert on rebuilding costs. Its residential rebuilding cost models are accepted as standard by surveyors and insurance loss adjusters. BCIS supplies an array of bespoke risk solutions to the insurance industry with services tailored to suit the business models and operational practices of insurers, online providers, aggregators and brokers. The organisation provides over 20,000 rebuilding cost figures to brokers, insurers and aggregators on a daily basis. Real-time residential rebuilding cost estimates enables insurance providers to accurately assess risk and competitively price products, whilst supporting the FSA 'Treating Customers Fairly' guidelines. Local Link Up - Contentys Ltd Trade News selected by Local Linkup on 03/02/2012