-The British government has told regulators to review and address the cost of insuring apartment blocks, which has surged since the Grenfell Tower fire in 2017 killed more than 70 people.
Britain’s housing minister Michael Gove said on Friday the insurance market has been “failing” some leaseholders since the disaster, as insurance premiums have doubled year-on-year.
Gove’s intervention comes weeks after Britain ordered housebuilders to pay around $5.4 billion to help remove flammable cladding from buildings, a central cause of the Grenfell blaze in west London.
“I require urgent advice on the scale and potential causes of the problem and what can be done to rectify these issues,” Gove wrote in a letter to the Financial Conduct Authority (FCA) and Competition and Markets Authority (CMA).
“My overall goal is for there to be a more affordable marketplace for buildings insurance.”
Gove called on the FCA to review the sector in close consultation with the CMA to find and assess the causes of rising building insurance costs and the lack of coverage available for some multiple-occupancy buildings.
The FCA said it was asking insurers and insurance brokers to consider what action they can take to help leaseholders. It also said in response to Gove’s letter that it was gathering data from insurers to understand the reasons for the premium rises.
The Association of British Insurers said it was working with the government and the FCA to help leaseholders.
“The cost of buildings insurance reflects the significant fire risks associated with many multiple-occupancy residential buildings,” the ABI added.
The CMA said it had taken a “close interest” in the matter and would engage with the FCA to review the problem.
Gove, Britain’s minister for levelling up, housing and communities, asked the regulators for initial feedback within three months and a final report within six months.