What Does Building Insurance Cover in Flats?

Building insurance is a great way to protect your property and make sure you can cover the cost of any damage or loss in case of accidents or natural disasters.

But, what does building insurance cover in flats?

In this article, we’ll explain what type of costs building insurance might cover, who is responsible for purchasing this type of insurance, and how much you need to protect your entire property.

Let’s dive in.

What Does Building Insurance Cover in Flats?

Building insurance, regardless of whether it’s for a flat or a house, is a type of insurance that covers the cost of repair to the structure of a building if it’s damaged in the events of:

• Fire
• Flood
• Subsidence
• Vandalism
• Storm
• Earthquake
• Frost
• Aircraft collision
• Vehicle accident

Building insurance covers any permanent fixtures and fittings. This includes things like your walls, floors, ceiling, doors, and windows, as well as built-in wardrobes, kitchen units, and bathroom suites. Some insurers may include insurance for when you are underpinning your house.

What does building insurance not cover? 

Building insurance for flats and houses does not cover damage or theft of stolen belongings and valuables. These items are usually covered by home insurance or tenants insurance (also known as renters insurance). This type of insurance covers contents such as furniture, clothing, appliances, and electronics.

Freehold flats vs Leasehold flats

Freehold is a form of ownership where the owner owns both the property and the land. 

In a freehold, the owner is responsible for the upkeep of the roof, walls, and all other structural elements, as well as any land associated with the property. Freehold ownership is more expensive but freeholders can use the property for any purpose and they won’t need to request authorisation from the state if they want to sell it. 

A leasehold, on the other hand, means that the owner of the property (usually a freehold) has given the occupant ownership of it for a finite number of years. If you buy a house as a leasehold, you’ll own the property but not the land itself.

The typical length of a leasehold agreement is 40 years, although some leases can be as long as 99 years or even up to 120 years. Under a leasehold agreement, the tenant is responsible for paying rent, annual maintenance fees for the common areas, and may be subject to other service fees.

Who is Responsible for Flat Building Insurance?

While having building insurance is not a legal requirement in the UK, occupants might be required to buy one by their mortgage providers.

Even if your lender doesn’t ask you to purchase insurance, it’s always a good idea to buy 

building insurance for mortgage to protect yourself financially if the worst happens.

If you’re a freeholder, you might have to buy joint freeholder building insurance with the person who leases the property.

The insurance should cover the following:

• Building damages from fire, theft, accidental damage, water damage, storm, and flood
• Any damages to communal areas like a garden, rooftop, garages, grounds
• Liability cover for accidents within the communal areas
• Communal contents like fitted carpets
• Leaks in service pipes
• Providing alternative accommodation in case the building or flat is inhabitable

In the majority of cases, it’s usually the freeholder who is responsible for purchasing buildings insurance for flats, including if you’re renting the property.

If you own several flats, you’ll probably have to get landlord insurance for flats, which often combines a number of insurance options.

However, If you’re a leaseholder, you’ll probably have to pay for the freeholder building insurance as part of the service charge (which covers general maintenance of the building). The freeholder might also ask you to take out leasehold buildings insurance or include the premiums on your bills.

If you’re flat-sharing, your biggest concern is getting insurance for your possessions since it’s usually the landlord that insures the building itself and buys insurance for flats that they own.

How Much Building Insurance Cover Do You Need?

When purchasing building home insurance for flats or a house, you should opt for a cover that would be able to pay for rebuilding the entire property from scratch. This is called the sum insured. 

The sum insured is the maximum amount that your insurer will pay to rebuild your home in case it gets completely destroyed. 

The cost of rebuilding your home is usually lower than the price you paid for it. If you want to find out exactly how much cover you need, you can use the Association of British Insurers’ online calculator to help you estimate the sum insured for your home. 

You’ll need to create an account, select a property type, and select all the relevant details to your flat or property to get an accurate number. 

Some insurers offer bedroom-rated policies. They calculate the sum insured based on the number of bedrooms you have. If you have more bedrooms than your policy covers, you could be at risk of being underinsured. 

Bottom Line

Insurance for flat owners is a must for any owner, leaseholder, and freeholder that wants to protect themselves from a financial perspective in case of accidents and incidents that can seriously damage their property. When it comes to insurance for flats, there are plenty of options to choose from so it’s best to take your time and find the one that suits your needs the best.