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Live in a flat? Check you have the right insurance

If you own a flat in a conversion or in a purpose-built block, you’ll need to find out who is responsible for providing buildings insurance. You may have to take out a specialist policy or work closely with your neighbours to find the best deal.


When it comes to insuring a house, it tends to be simple – you’re usually required by your mortgage provider to have buildings insurance to cover the structure itself, and then you can choose to get contents insurance on top to cover damage to your possessions.


But if you own a flat, the situation becomes slightly murkier as you may not own the structure of the building you live in.


Paul Robertson, managing director and head of property division, explains that when it comes the rules of ‘insurable interests’, you need a financial interest to insure something. When you buy a flat, you have no financial interest if the lease says someone else needs to insure it. A common misconception is that you can get buildings insurance in this scenario,” he says.


Who is responsible for building insurance?

To establish what, if any, insurance is needed, you first need to take it back to basics and to find out if you own your flat on a leasehold, freehold or a share-of-freehold basis. This information will be in your lease agreement.


Freehold is where you own the building and the land it stands on outright. With a share of freehold, you own a proportion of the building and the land it stands on. For example, you may own 50% of the freehold of a house that has been converted into two flats. Up to four individual leaseholders can be named on the freehold. The freehold can also be held by a limited company with all or a number of leaseholders being shareholders.


If you’re a freeholder or have a share of the freehold, it’s more than likely you’ll be responsible for insuring the building.


Leasehold, on the other hand, is where you have a lease from the freeholder to use the home for a number of years. In this scenario, it’s likely the freeholder is responsible for the buildings insurance, which you’ll pay for through an annual service charge.


There are about 2.75 million flats where the freehold is owned privately – whether that’s by a property investor, management company or by private individuals who have bought the freehold.


What type of insurance do I need?

Once you’ve established whether you’re responsible for insuring the building, you then need to buy buildings insurance. Even if there are several freeholders, it is likely you will need to work together to find one policy covering the entire building.


A spokesperson for insurer Aviva comments: “If your property is a flat or maisonette, it may be best insured as part of one policy for the whole building. In the event of a claim affecting more than one property, this reduces the likelihood of problems due to some being uninsured or insured on a different basis.”


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