Being a landlord for a block of flats, as opposed to a single apartment, can be difficult if you do not have the right insurance in place. Whilst the financial benefits can be huge, there are considerable risks you should be aware of before you begin.
In this guide, we’ll look at\ the key information you need when looking for cover, exclusions you should consider, and how to get the best quote for your cover.
What is block of flats insurance?
Block of flats insurance, also known as property portfolio insurance or commercial combined insurance, is designed to cover multiple properties under one policy. This can be anything from a small portfolio of flats to large commercial premises such as shopping centres.
The main benefit of this type of policy is that it offers economies of scale, meaning you could potentially save money by insuring multiple properties on one policy. It can also be more convenient as you only have to deal with one insurer and make one payment.
What does block of flats insurance cover?
The cover provided by a block policy will depend on the insurer and the type of property you are insuring. However, most policies will provide cover for damage to the buildings and contents, as well as liability cover in the event that someone is injured on your property.
Some insurers will also offer cover for loss of rent in the event that your property is uninhabitable due to damage, and legal expenses cover if you need to take action against a tenant.
What are the exclusions?
As with any insurance policy, there will be certain exclusions that you should be aware of before you buy. These can vary depending on the insurer, but some common exclusions include:
- Flooding: Many policies will exclude cover for damage caused by flooding, so it’s important to check if your property is located in a flood risk area. You may be able to add optional flood cover to your policy for an additional premium.
- Subsidence: This is a common exclusion on block of flats insurance policies, so it’s important to check if your property is at risk of subsidence before you buy.
- Asbestos: If your property contains asbestos, this will usually be excluded from cover. You may be able to add optional asbestos cover to your policy for an additional premium.
What is block management?
Block management is the process of managing a block of flats, including organising repairs and maintenance, collecting service charges, and dealing with tenancy agreements.
If you’re a landlord for a block of flats, you may be required to appoint a professional block manager to take on these responsibilities. This can be an important consideration when you’re choosing insurance cover, as some policies will only provide cover if a professional block manager is in place.
The upsides of having your block managed by a company is that it can free up your time, as you won’t have to deal with the day-to-day running of the property. It can also make it easier to keep on top of repairs and maintenance, as the block manager will be responsible for organising this.
The downside is that you may have to pay a service charge to the block management company, and you may not have as much control over how your property is run,
How much does block of flats insurance cost?
The cost of your policy will depend on a number of factors, including the value of your property, the level of cover you require, and the excess you are willing to pay. It’s important to shop around and compare quotes from different insurers to make sure you get the best deal.
You can also save money on your premium by taking out a policy with a higher excess. This will mean you pay more towards any claims, but it could help to reduce the cost of your premiums.
Is the freeholder responsible for building insurance?
The freeholder is usually responsible for arranging building insurance, but it’s worth checking your lease agreement to be sure. If you’re a leaseholder, you may be responsible for insuring the contents of your property.
Who is responsible for insuring a block of flats?
The freeholder is usually responsible for insuring the building, but it’s worth checking your lease agreement to see if you’re required to insure the contents of your property. If you’re a leaseholder, you may also be responsible for paying the service charges for the block.
If you’re a landlord for a block of flats, you may be required to appoint a professional block manager to take on responsibility for arranging insurance cover. This can be an important consideration when you’re choosing insurance cover, as some policies will only provide cover if a professional block manager is in place.
Do you need building insurance in a block of flats?
Building insurance is not a legal requirement, but most mortgage lenders will insist that you have it in place if you’re borrowing money to buy a property.
It’s also worth considering even if you’re not required to have it, as it can provide valuable protection for your property. If your property is damaged or destroyed, building insurance can help to cover the cost of repairs or rebuilding.
What is the difference between block of flats insurance and buildings insurance?
Block of flats insurance and buildings insurance are both types of cover that can be used to insure a block of flats. However, there are some key differences between the two:
- Block of flats insurance is usually arranged by the freeholder or landlord, and covers the whole building. Buildings insurance is usually arranged by the leaseholder, and only covers their own individual property.
- Block of flats insurance usually includes cover for common areas, such as lifts and stairwells. Buildings insurance usually only covers the property itself, and not any common areas.
- Block of flats insurance premiums are usually paid by the freeholder or landlord, while buildings insurance premiums are usually paid by the leaseholder.
Which type of cover you need will depend on your circumstances. If you’re a freeholder or landlord, you may need to take out block of flats insurance to comply with your mortgage lender. If you’re a leaseholder, you may be able to choose between block of flats insurance and buildings insurance, depending on which is best for your needs.
What if I have tenants in my property?
If you have tenants in your property, it’s important to make sure they are adequately insured. Most insurers will require you to take out landlord’s insurance if you have tenants, so check your policy documents carefully.
You should also make sure your tenants are aware of their responsibility to insure their own belongings. Many landlords include a clause in the tenancy agreement requiring tenants to take out their own contents insurance.
How can I get the best quote for my block of flats insurance?
The best way to get a competitive quote for your insurance is to shop around. We partner with a wide range of dedicated brokers who specialise in block of flats insurance and are best positioned to give you a bespoke policy at a fair price.
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