Insurances, Leaseholders

Long Term Agreement for the Provision of Leasehold Building Insurance

Long Term Agreement for the Provision of Leasehold Building InsuranceThe following letter and documents were sent to all the leaseholders of the estate. The documents are related to the Leasehold Building Insurance.

Please read more information below:

Leaseholder Services
London Borough of Camden
Bidborough House
38-50 Bidborough Street
London WC1H9DB

Tel: 020 7974 5107
Fax: 020 7974 6327

Date: 10th July 2012
Your Reference:
Our Reference:
Contact: 020 7974 5107

Camden Street
London NW1

Dear Leaseholder,

Lease Address: Goldthorpe, Camden Street, London, NW1

Long term agreement for the provision of leasehold building insurance

Please find enclosed the Council’s first stage notice, Notice of Intention, to enter into a qualifying long-term agreement for a boroughwide contract of building insurance for leasehold properties.

The Council wishes to develop a long-term agreement with a reputable insurer to secure value for money and improve the quality of service provided to the Council’s leaseholders. The Council is responsible for arranging buildings insurance for most leasehold properties under the lease terms.

The current insurance policy was procured in March 2011 for a period of five years, with an option to extend or rescind after two years. This was procured via a competitive tendering process and statutory consultation was also undertaken with leaseholders.

The current insurers gave a rate guarantee for two years from 1st April 2011 which expires at the end of March 2013 and then the Council has the option to renew on a yearly basis with our current insurers for another three years or retender the contract. The Insurers also have the option to increase the rate if they wish to do so.

It has therefore been decided to retender the contract for 2013 onwards with the other London Insurance Consortium members with a view to trying to obtain better value for our Leaseholders.

The London Borough of Camden Council is a member of the London Insurance Consortium. This is a consortium of nine London boroughs set up with the joint aim of improving risk and obtaining better value for insurance and related services for its corporate needs. As a result, the Council has seen an improvement in both rates and cover and it is therefore proposed that a joint tender with the other eight boroughs is now used for the benefit of leaseholders.

The Consortium will therefore undertake a tendering exercise for all member Councils in accordance with the Public Procurement Regulations. Bidders will then be evaluated on a combination of price, policy coverage and quality of service. This means that, whilst we are very mindful of the requirement to help with household budgets and hence a competitive premium needs to be secured, this will not be at the expense of comprehensive policy cover, with quality of service needing to be maintained or enhanced. This is in line with the Consortium’s approach to evaluation of their own tenders, however, the winning bids for this tender will be assessed on an individual borough basis.

It is the clear intention of the Council to obtain the best deal on behalf of leaseholders. The approach will be very much on a ‘partnership’ basis (again, as works really well with the Consortium) in order to counteract the adversarial stance that has sometimes been shown by insurers in the past, and almost led to withdrawal of facilities. We will be looking to balance cost against cover and service on the basis of our existing terms of sum insured policy with a £250 excess (and £1,000 excess on subsidence claims), but with a rate ‘guarantee’ for future years being tied into claims experience (both up and down).

The Council anticipate the total value of this contract will be approximately £2.3 M per annum (subject to market forces and claims experience); this figure relates to all leaseholder insurance in the borough. The contract sought will be for a maximum five year period.

We now invite you to make any observations that you have regarding the Council’s decision to retender for an insurer using the enclosed observation form. Once the 30 day observation period has expired the insurance specification will be finalised. The consortium will then seek tender prices from the market. Once all tenders have been returned we will issue a Stage 2, Notice of Proposal, this Notice will set out the proposed insurer and your estimated annual contribution.

Should you have any questions regarding this Notice please do not hesitate to contact Leaseholder Services on the telephone number above.

Yours sincerely

Jo O’Donnell
On behalf of London Borough of Camden


o Statutory notice for Insurance
o Observation form for Insurance
o Questions and Answers Information
o Insurance Renewal Document
o Leaseholder’s Forum Election Information

WHICH A PUBLIC NOTICE IS REQUIRED Section 151 Commonhold and Leasehold Reform Act 2002 – Schedule 2

To all leaseholders of the London Borough of Camden and all recognised tenants’ associations.

1. It is the intention of London Borough of Camden to enter into a long term agreement for the provision of an insurer(s), with respect of which we are required to consult leaseholders.

2. The service to be provided under the agreement is the provision of insurance services.

Insurance coverage necessary to ensure that our buildings are covered for insurable perils, and to fulfil Camden’s obligation contained within the lease. The policy will provide cover against the following perils:

• Fire
• Smoke
• Explosion
• Lightning
• Earthquake
• Riot & civil commotion
• Strikes, labour or political disturbances
• Malicious damage
• Collision by vehicles, aircraft or animals
• Storm or flood
• Escape of water from any fixed tank
• Falling trees or branches
• Theft or attempted theft
• Subsidence & ground heave, or landslip
• Leakage of oil from any fixed oil-fired installation
• Damage caused by falling television aerials or satellite dishes
• Accidental Damage (owner occupied properties only)

The policy also provides the following additional covers:

• Professional fees necessarily incurred in reinstating insured damage
• Debris removal, demolition, shoring up costs following insured damage
• The additional cost of reinstating insured damage incurred in complying with public authority requirements
• Loss of Rent & Alternative Accommodation when leasehold properties are rendered uninhabitable by insured damage.
• Legal Liability as Owner – Limit of Indemnity £2,000,000.
• Trace and Access – costs incurred in relation to the leaseholder’s demise in locating the source and subsequent making good following damage by escape of water – limit £5000 any one loss.

The current cover complies fully with the requirements of the Council of Mortgage Lenders and there are no proposals to change the level of cover.

3. You are invited to inspect our proposals and any related documents at Camden Town Hall on Judd Street WC1H 9JE. Appointments are available from the 10th July to 13th August 2012 during office hours 9am – 4pm from Monday to Friday.

To make an appointment please contact Claire Coghlan on 0207 974 5790, email her at, or contact Leaseholder Services in writing using the address below, and we will organise an appointment for you.

4. In this instance Camden will not be inviting leaseholders and recognised tenants’ associations to nominate a firm. This is because the total value of this agreement exceeds the notional value of the European Union procurement rules, which means that this contract will be advertised in the European Journal, and will allow any interested firm within the ED to tender.

5. We invite you to make written observations in relation to the proposed works by sending them to:

London Borough of Camden
Leaseholder Services
Ground Floor
Bidborough House
38-50 Bidborough Street

Or emailing: quoting in the subject line.

Observations must be made within the consultation period of 30 days from the date of this notice. The consultation period will end on 13th August 2012 and all observations need to be received by this date.

Signed on behalf of London Borough of Camden:

Jo O’Donnell
Consultation and Final Account Principal
10th July 2012

Questions and Answers:

How will we consult leaseholders?

Leaseholders will be consulted in line with legal requirements through direct correspondence both before and after the tendering process, and also through discussion with the Leaseholder Forum.

Who are the consortium members?

• London Borough of Camden
• London Borough of Croydon
• London Borough of Haringey
• London Borough of Harrow
• London Borough of Islington
• London Borough of Lambeth
• Royal Borough of Kingston upon Thames London Borough of Sutton
• London Borough of Tower Hamlets

What are the benefits of a joint tender?

We see the potential benefits of the joint tender as follows:

a) greater buying power leading to better rates
b) improved insurance cover
c) improved service levels particularly for claims

Whilst London Borough of Camden’s premium spend for leaseholders is approximately £2.3 M per annum, the total premium spend for the nine boroughs is nearer to £10 million per annum. This larger premium is due to be significant number of leasehold properties in other boroughs. We believe that London Borough of Camden leaseholders can benefit from the greater buying power of the consortium overall rather than through an individual tender.

The benefits of a joint tender are not just limited to more competitive premiums. The greater buying power of the consortium can potentially help us secure more comprehensive cover for leaseholders and improved service levels particularly in the event of claims.

How will the tender be evaluated?

Evaluation will be points based, with the bidder scoring the highest number of points winning the tender. Firstly total premiums will be rated between bidders with lower premiums scoring more points than higher ones. Additional points will then be allocated for ‘quality’ items offered by individual insurers. These quality items could include beneficial improvements to policy wording, rate guarantees, or enhanced service levels.

Will London Borough of Camden leaseholders end up paying more because of other borough’s claims experience?

The short answer is no. Insurers when tendering will be required to quote a price for each borough individually based on its own claims experience and, as appropriate, insurance policy requirements.

So, for example, all insurers will be required to quote on a sum insured basis based on the claims experience of the London Borough of Camden’s leaseholders and no one else’s claims experience or policy requirements.

This is the reason for the winning bids for this tender being assessed on an individual borough basis.

Are there any risks/downsides of a joint tender?

We don’t believe so. London Borough of Camden Council’s experience to date, as part of the consortium, has always been positive, and we see no reason why leaseholders should not experience the same results.

It is, nevertheless, our intention to consult with the market place (prior to tender) to ensure that there are no unforeseen issues that could adversely impact on the result for London Borough of Camden’s leaseholders.

Who are the potential insurers?

• Zurich Municipal
• Aspen
• Ocasso
• Royal Sun Alliance .

All of these providers are currently active in providing leasehold insurance to local authorities. We will approach these providers individually to ensure that they will be able to quote on this joint tender, as well as some of the direct insurers who do not normally look at this type of business. One of the advantages of a joint tender of this scale is the potential to invite further competition and therefore more competitive rates for the benefit of leaseholders.

Re: Household Buildings Insurance 2012 – 2013

Date: 10th July 2012

Camden Street
London NW1

Our Ref:

Dear Leaseholder,

Re: Household Buildings Insurance 2012 – 2013

As freeholder and/or landlord of your leased property, the Council is obliged to arrange building insurance to insure your property, your mortgagor and our interests in the property.

Following the consultation process undertaken in 2010 and 2011, the council procured a 2 year contract with Zurich Municipal with the option to extend for a further 3 years. I am pleased to advise that the insurance has been renewed to 31st March 2013 in accordance with this contract.

A summary of your insurance cover is enclosed along with an important notice from the insurers, which you need to keep safe in the event that you need proof of insurance when selling or reassigning your property. A new policy booklet is also available that provides full details of the cover in place. Copies of the policy booklet are available from Leaseholder Services upon request (0207 974 3559) or you can obtain an electronic copy via the Leaseholder Services area of the Council’s website.

The claims handling process remains the same with leaseholders being able to report claims directly to the insurer. The telephone number for reporting new claims has changed and is now 08000 159 329 during normal office hours and for out of hours and emergencies. Your claim details will be taken over the phone and you will be given an answer on how to proceed immediately. Claims can also be reported to the insurers via email or post (please refer to your policy booklet for further details). The contact number for the Zurich claims team for queries on existing claims remains 08700 108 855.

The insurers can provide assistance with obtaining a suitable builder or repairer, or alternatively you are able to use your own preferred tradesperson. If you wish to use your own repairer, you will need to provide your own repair estimate and the insurers will be able to give an answer on how to proceed. The exception to this process are large claims, claims involving common parts and subsidence claims where the housing repairs team will have an interest and the insurer will need to appoint a Loss Adjuster to project manage the claim on their behalf.

Please remember to keep your documents safe and contact Leaseholder Services on 0207 974 3559 should you require any further assistance.

Yours sincerely,

Robert Edwards
Deputy Insurance Manager

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