Insurance premiums have tripled for some buildings. Others can't get coverage at all. The insurance industry's response to the fire safety crisis is creating a secondary crisis of its own.. The Perfect Storm The UK building insurance market is in crisis. The convergence of the cladding scandal, the Building Safety Act, climate change, and global reinsurance hardening has created a perfect storm: Average premium increase since 2020: 187% Buildings unable to obtain ANY insurance: 340+ Average excess for fire claims: increased from £2,500 to £15,000 Insurers exiting the residential block market: 4 major firms since 2022 EWS1 B2 buildings: premiums 400 600% above market average Who Is Being Hit Hardest? Cladding Affected Buildings Buildings with combustible cladding or EWS1 ratings of B2 face: Premiums of £800 £2,000 per unit (normal: £150 £300) Excesses of £50,000 £100,000 for fire claims Policy exclusions for fire originating in external walls Some buildings completely uninsurable Mixed Use Buildings Buildings with commercial ground floors face: Premium loadings of 40 80% for restaurant/takeaway use Exclusions for fire originating in commercial units Requirements for hourly fire separation verification Older Buildings (pre 2000) Insurers demanding invasive fire safety surveys Premium loadings for buildings without sprinklers Rejection of applications where fire risk assessment is overdue MMC Buildings CLT buildings: 35 85% premium loadings SIPs buildings: some insurers refusing to quote Construction phase insurance increasingly difficult to obtain The Impact on People Leaseholders Service charges increasing by £1,000 £5,000/year due to insurance Unable to sell due to excessive insurance costs deterring buyers Unable to remortgage as lenders require adequate insurance Trapped in a cycle of rising costs and falling property values Building Owners Facing unlimited liability if uninsured Self insuring through captive arrangements (complex, expensive) Delaying maintenance to fund insurance premiums Considering selling at distressed prices The Market Developments becoming financially unviable due to insurance projections Investors withdrawing from UK residential market BTR (Build to Rent) sector most affected Insurance costs threatening the government's housing targets What You Can Do For Building Owners 1. Invest in fire safety — documented improvements reduce premiums 2. Sprinkler installation — typical premium reduction: 15 25% 3. Fire risk assessment — up to date, qualified assessor, actions completed 4. Specialist brokers — use brokers who understand the residential block market 5. Consortium buying — group purchasing with other building owners 6. Government schemes — check eligibility for Cladding Safety Scheme funding For Developers 7. Design for insurability — consult insurers at RIBA Stage 2 8. Exceed minimum standards — sprinklers, enhanced detection, robust compartmentation 9. Document everything — golden thread compliance helps at renewal 10. Avoid problematic materials — combustible insulation, certain cladding systems Magnus Opifex helps building owners optimise fire safety to reduce insurance costs. Contact us for a fire safety audit.