Enquiry into Commercial Insurance Policy -for someone who is not the policy holder, but pays towards the insurance

[Tosca1]

Hello,

I would like to seek some advice please, regarding a Commercial Insurance Policy, which my elderly mother is paying towards,  but is not the policy holder.  As her power of attorney, I am trying to find out if  there is a way I can talk to the insurance company,  in order to clarify some concerns I have on  how this  particular insurance policy effects my mother.  For example, as she  owns outright her residential flat, why is she paying for a commercial/business insurance policy?    I also would like to discuss with the insurance company,   as to whether there have been any insurance claims made against this policy.  Last year the flat beneath my mother's, who is owned by the policy holder, underwent extensive refurbishment works, including repair for  water damage.  This water damage allegedly had come from an outlet pipe, on the outside wall of my mother's flat.  The policy holder is now asking my mother to pay for the cost of those repairs.   

 

 

I have tried to speak to the policy holder directly about my concerns regarding how the policy affects my mother , but they have refused to discuss with me anything to do with the policy, except to demand  she pays for the repair costs and her contribution to the renewal of the insurance policy.  I have contacted the insurance company directly to see if they could advise me.  They said, as my mother is not the policy holder, their hands are tied.  The only thing they could suggest was for me to write a letter voicing my concerns, to the policy holder.  Given that I have already tried this, I would like to clarify my legal options going forward.

 

 

 

To help with any advice you might be able to give me, i have written down some background information  concerning my mother's situation, it is as follows :- 

 

My elderly mother (whom I am now power of attorney for), shares a building of multiple occupancy  and consists of.

 

• My mother's flat, which is a massionette and consists of the top 2 floors. 
• 1st Floor residential Flat.
• A ground floor business premises

 

The set up is:-

• The ground floor business premises and first floor flat are owned by the same person (the policy holder of the insurance policy)  Their relative lives in the first floor flat and that same relative runs a business from the ground floor premises.  From my understanding, I think the owner is classed as owning the whole building apart from my mother's flat (which she owns).  
• My mother has a 100 year lease on her flat and has to pay ground rent every year to the Policy holder (owner.
• There is shared access for both flat 1 and my mother's flat.  This includes:- communal main door from the street into the building, a passage way running from the front door to back door leading to a back yard, a stair case leading to first floor flat.  Then my mother then has her own flight of stairs leading to her flat.

 

 

The Commercial insurance policy - set up by the policy holder(owner) of the building consists of:-

• A commercial/business one.
• My mother has to pay 50% of the total this insurance policy annual renewal costs and has done this for many years.
• The policy name holder - is the owner of the ground floor business premises and 1st floor residential flat .
• The only place where my mother's name is on the policy, is under a section called 'Business Interruption', under a sub heading called 'special interests'.
• My mother also pays her own home insurance (with a general home insurers) for her flat and contents.
• The owner is refusing to discuss the contents of the insurance policy with either my mother or myself.

 

My main concerns are:- 

• If my mother is not down as a policy holder,  also my mother's flat is residential and she owns it, then why is she paying for 50% of the total cost of the commercial/business insurance policy renewal  for the whole of the building and the other half is paid by the policy holder (the owner)?
• Flat one, is also residential, but the ground floor premises is a business?  How does this work for a commercial insurance policy?
• What happens if there is an accident, in flat one and ground floor premises -  how does this effect my mother if a claim on the insurance is made? 
• What is my mother covered for with this policy - what about her flat contents.  Does she need to be paying for her own general home insurance?
• My mother is down as a special interest, on the Business interruption sections, what does this mean?
• Has there been any insurance claims made against this particular policy? 
• What happens if claims have been made for flat 1 or business and nothing to do with my mother, then the cost of the insurance goes up, where does she stand on this?

 

Other concerns I have:

• The owner  (policy holder) has been harassing and demanding both  my mother and myself on other matters.  Such as making allegations that she  (my mother) leaves the main communal door unlocked all day.  The door is only unlocked when my mother's career, District Nurse and  cooked meals arrive, after that the door is locked.  As well as this, the policy holder is also kicking my mother (who is in her late 80's) off flat one's flat roof, which she (my mother) has used as a small roof garden for over 40 years and is something that she loves as well as helped in her recovery of 2 strokes. 
• Given the owner's defensive and demanding, as well as and harassing behaviour, I am suspecting a hidden agenda.  My mother is vulnerable, as she lives on her own and is in her 80's.  Her flat is very big and could be easily converted into 2 big flats.   As the policy holder already owns the rest of the building, the addition of my mother's flat, would be very financially rewarding for them.

 

I would appreciate any help you might be able to give me,  regarding my legal position with this matter.

 

Many thanks

[dx100uk]

is this policy with swinton?

 

dx

 

[unclebulgaria67]

It would be a commercial policy to cover the whole building in the name of the freeholder, with the name of the private leasehold living in the maisonette above, noted as an interested party.  This is a standard arrangment for such mixed occupation buildings. 

 

If the approximate size of the commercial premises and the maisonette is about the same, then a 50/50 share of the Buildings Insurance would be appropriate. 

 

In this situation,  you need to refer to the leasehold agreement in regard to Insurance.  It may state how the Insurance must be arranged i.e. by the freeholder and that the leaseholder will be required to pay 50% of the cost. It may also provide a legal requirement on the freeholder to provide details of the Buildings Insurance to the leaseholder on request.

 

Yes Insurance claims  by the commercial premises occupier could impact on the premium your Mother pay towards.  Again check leasehold agreement for rights on getting hold of Insurance information.

 

In regard to disputes with the freeholder, keep a wriiten diary record of anything that happens. Believe there are actions that can be taken, if harassment is evidenced over a period.  Both Police and Local Authorities have authority to issue warnings.

[AndyOrch]

Most commercial landlords are responsible and liable for the building insurance for the whole of the property.....if the landlord has a mixed insurance policy Commercial and Residential with contents then that's possibly the reason your mother has been asked to make a contribution towards the annual premium..

 

You state your mother owns her part of the building and has her own insurance..contents only. If her contents are covered on the Landlords policy she really shouldn't require her own. If shes not covered on the landlords contents then IMHO she shouldnt be required to pay towards the Landlords policy.

 

Andy.

 

 

 

[unclebulgaria67]

Freeholders Buildings Insurance covers whole building and cannot cover Contents of the private leaseholder, as no Insurable interest. The private leaseholder has to take out their own Contents Insurance for their own possessions.

 

The issue to be cautious about, if full Insurance protection is required of the leasehold maisonette internal fitting and fixtures, is that the freeholders Buildings Insurance may not cover the leaseholders kitchen and bathroom items. It only covers the structure including internals walls and ceilings. What the leaseholder needs to do is make sure Contents Insurance covers their kitchen, bathroom as well as other fixtures and fittings.

[stu007]

Hi

 

I have to agree with the above the Freeholder/Management Company for that Building Insurance will cover the entire building but what it will not cover is the leaseholders own contents within their own property as the liability for that is down to the Leaseholder.

 

The OP really need to have a good read of his mother Leasehold Agreement so see what it states about Insurance requirements and Liability

 

If the OP could manage to get a copy of that Leasehold Agreement and scan to PDF and post it here minus personal detail we may be able to advise the op further.

 

The OP also need to inform the Freeholder/Management Company that they are Power of Attorney (PoA) for there Mother and this should be done in writing ensuring to enclose a copy of the PoA Document and make sure and get free proof of posting from the Post Office.