Leaseholders Pay For Buildings Insurance
If your flat is in a block of flats then it’s likely that you’ll need to take out buildings insurance. This is because it will protect your property in the event of fire or flood damage. It may also be needed to secure a mortgage. However, do you need to pay for it yourself?
The answer depends on your lease and whether you are a freeholder or a leaseholder. If you’re a leaseholder, the responsibility for arranging buildings insurance usually falls to your freeholder. In this case you’ll need to check your lease and make sure that they are complying with their obligations. You should also ask your solicitor to check on your behalf.
Leasehold Services Buildings insurance covers the structure of your home and any permanent fixtures, fittings or improvements that you’ve added to it, such as a bathroom suite. It can also cover any contents that you own, and can include features like fire and theft cover and cover for your possessions if they are kept away from the home.
Do Leaseholders Pay For Buildings Insurance?
You should get a quote for buildings insurance and consider what features are included in the policy, such as third party liability cover. In addition, you should ask if the policy is fully compliant with all building regulations.
Some leasehold blocks have multiple flats, and you might find it easier (and cheaper) to club together with the other leaseholders in the building. This will mean that all the leaseholders have a policy and it will be cheaper than trying to arrange a separate policy for each of your flats.
Alternatively, you could try and speak to the freeholder about arranging buildings insurance for the whole building. This is common with residents associations or if you own a share of the freehold, and it’s a good idea to do so because it will mean that the whole building is insured and has the same level of cover.
Your lease should tell you whether your freeholder is responsible for arranging buildings insurance for the entire building or only for individual flats. If your lease says that the freeholder is responsible for arranging buildings insurance then they must provide you with a copy of their policy within 21 days, and if they fail to do this they are breaching a legal obligation.
As a leaseholder you can expect that your freeholder will be able to tell you how the building is covered and what premiums are being charged by their insurer. You should then be able to compare quotes and choose the best policy for you.
The Financial Conduct Authority (FCA) has today published a range of potential remedies to help ensure the market for multi-occupancy residential buildings insurance operates better for leaseholders. They aim to give leaseholders greater protection from high prices and to improve the availability and affordability of insurance for them.
It is important to note that the FCA has commissioned the review of multiple-occupancy residential buildings insurance following concerns that since the Grenfell tragedy many leaseholders have been struggling to afford their annual insurance bills and have been faced with some very high costs. This has resulted in a reduction in the supply of buildings insurance and a reduction in some insurers’ appetite for this business.