Gove tells FCA to probe flat insurance hikes
Michael Gove has called on the Financial Conduct Authority and the Competition and Markets Authority to look into why the buildings insurance market is “failing some leaseholders”.
In an open letter sent to the chief executives of the FCA and CMA this morning, the housing secretary said he was “extremely concerned” by the pressure placed on leaseholders by “rapidly escalating building insurance premiums on high- or medium-rise blocks of flats”.
“Understandably, many policyholders do not view the market as effectively delivering accessibly priced, widely available insurance. I share that view, and do not consider this an acceptable situation,” he wrote.
Michael Gove has called on the Financial Conduct Authority and the Competition and Markets Authority to look into why the buildings insurance market is “failing some leaseholders”.
In an open letter sent to the chief executives of the FCA and CMA this morning, the housing secretary said he was “extremely concerned” by the pressure placed on leaseholders by “rapidly escalating building insurance premiums on high- or medium-rise blocks of flats”.
“Understandably, many policyholders do not view the market as effectively delivering accessibly priced, widely available insurance. I share that view, and do not consider this an acceptable situation,” he wrote.
Gove said the risk of fire in multi-occupancy buildings had decreased and was continuing to decrease, due to the measures brought in after the Grenfell Tower tragedy of 2017. However, insurance premiums were continuing to increase.
“I have been particularly concerned to hear of cases where insurance premiums have escalated by over 100% year-on-year, leaving residents with crippling costs,” he wrote. “I am also concerned to hear that many insurers seem unwilling to offer new policies, forcing people to shop in a more limited market place with more restrictive terms or less coverage; in many cases, trapping people with their current provider.
“It is clear to me that the insurance market is failing some leaseholders.”
The housing secretary said he was calling on the FCA, in close consultation with the CMA, to “shed light on the underlying causes of year-on-year price increases” and “assess the causes of the marked restriction in coverage available for multiple-occupancy buildings”.
He added that initial feedback would be expected within three months, and a final report within six months.
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