Table of Contents
Freeholder Building Insurance: Complete Guide
Overview of Freeholder Building Insurance
Freeholder building insurance is a type of policy designed to protect the owner of a freehold property against damage to the structure and communal areas. Freeholder insurance is a specialized policy that covers the structural components and common areas of a freehold property, providing protection against risks such as fire, flood, storm, and accidental damage. This insurance is essential for freeholders who are responsible for the maintenance and repair of the entire building, including shared spaces and individual units.
Freeholder buildings insurance is typically needed by anyone who owns the freehold of a property that contains multiple units, such as flats, apartments, converted houses, or purpose-built blocks. Flats building cover and block cover are particularly relevant for freeholders of apartment blocks or converted houses, as these policies ensure comprehensive protection for all units and communal areas within the property.
Typical risks covered by building insurance include fire, flood, storm, subsidence, vandalism, and accidental damage to the property. Buildings insurance policies can vary depending on property types, such as flats, converted houses, or purpose-built blocks, and are designed to protect the entire building, including both individual flats and shared structures. While freeholder building insurance is highly recommended to safeguard your investment and meet your responsibilities, it is not always a legal requirement. However, understanding your legal obligations as a property owner is essential.
Why Use Emerald For Your Freehold Insurance?
Emerald has been covering freehold issues and answering customer questions for well over a decade. We aim to be friendly, clear, reliable and cost-effective. We score very highly on customer reviews and all our staff are trained in the issues around freeholder buildings insurance – but we aren’t on any comparison site.
If you are the freeholder responsible for organising the insurance policy for your freehold then we are here to help.
You can see our page on freehold insurance HERE. To start the process for getting a home insurance quote/block of flats quote or similar around freeholder cover, please call us on 0330 113 7109 or email us on customerservice@emeraldlife.co.uk and we would love to hear from you.
Freeholder Liable: Responsibilities and Obligations
A freeholder is generally responsible for arranging and maintaining building insurance for the entire property. This means the freeholder is liable for insuring the building structure, including communal areas and shared facilities, to ensure comprehensive coverage. The freeholder is also responsible for repairs and maintenance of external structures, as well as ensuring that the insurance policy meets the needs of all leaseholders.
Maintenance obligations tied to insurance duties include regular upkeep of the property, prompt repairs to communal and external areas, and ensuring that the building remains in good condition. Compliance with safety regulations is a key part of the freeholder’s insurance duties, as meeting health and safety standards helps prevent liabilities and ensures the property is legally compliant.
In terms of statutory duties, the freeholder must adhere to all legal requirements regarding property maintenance and insurance. A managing agent may be appointed to arrange building insurance and ensure all legal and maintenance obligations are met, providing professional oversight and coordination for the entire building or block.
Leasehold Property Vs Freehold Property
When comparing leasehold and freehold property responsibilities, it’s important to note that a freeholder owns the property and the land outright, with no time limit, and holds ultimate control over the building and common areas. In contrast, leaseholders typically pay ground rent to the freeholder as part of their ongoing obligations, since they only have the right to occupy the property for a set period.
Service charges are another key difference. The annual service charge bill paid by leaseholders often includes a portion allocated for buildings insurance costs, as well as other charges for property maintenance and management.
When reviewing your lease for insurance clauses, check whether the freeholder or a managing agent arranges the building insurance. In some cases, a residents association may be involved in managing building insurance and communicating with leaseholders about coverage and costs.
Joint Freeholder Building Insurance
Joint freeholder building insurance is needed when a property is owned by more than one freeholder, such as in cases where a building has been converted into more than one dwelling. This is particularly important for properties containing multiple flats or just two flats, as each flat may be owned by different individuals or entities. In these situations, a joint freeholder building insurance policy ensures that the entire building is comprehensively covered, regardless of the number of owners or the specific configuration of the property.
To arrange a joint policy, you will typically need proof of ownership for each flat, details of the building’s structure, and information about all freeholders involved. The insurance payout is usually allocated proportionally based on each freeholder’s share in the property, as outlined in the title deeds or lease agreements.
It is recommended to include clear clauses in the joint freeholder agreement specifying how insurance premiums are split, how claims are managed, and how disputes are resolved. This helps prevent misunderstandings and ensures all parties are protected.
Block Of Flats Insurance And Freeholder Buildings Insurance Cover
When arranging freeholder building insurance for a block of flats, it is essential to ensure that the policy covers the whole building, including all individual flats and communal areas. A standard block insurance policy or flats insurance cover is specifically designed to protect the whole building, including communal gardens, hallways, stairwells, and other shared spaces. This comprehensive approach ensures that both the structure and the communal facilities are adequately insured in the event of damage or loss.
Communal areas that should be included in the cover typically consist of corridors, lifts, communal gardens, roofs, and any shared amenities. It is important to review the policy details to confirm that all relevant communal spaces are protected.
For rebuild valuation, it is recommended to use a professional surveyor to assess the cost of rebuilding the entire block, including all communal areas and features. This ensures the sum insured is accurate and avoids the risk of underinsurance.
Common exclusions in freeholder buildings insurance cover may include wear and tear, damage from poor maintenance, or certain types of flooding. Converted houses, due to their unique structure and history, may require specialized insurance to address non-standard construction or heritage features. Always check the policy wording and seek professional advice to ensure all aspects of your property are properly covered.
Building Insurance Cover Types For Freeholders
Structural buildings cover protects the physical structure of the property, including walls, roof, and permanent fixtures, against risks such as fire, flood, and storm damage.
Public liability cover is essential for freeholders, as it protects against claims if someone is injured or their property is damaged due to the building. Landlord insurance policies often include third party liability, third party liability cover, property owner liability, and party liability. These types of liability cover are crucial for protecting freeholders and property owners from legal claims arising from injuries or damages suffered by tenants, visitors, or others in communal or multi-occupancy settings.
Loss of rent and alternative accommodation cover ensures that, if the property becomes uninhabitable due to an insured event, the freeholder is compensated for lost rental income and the tenants are provided with alternative accommodation.
Optional covers can include subsidence protection and terrorism insurance. Terrorism insurance is an additional option for freeholders seeking comprehensive protection, as it covers damage caused by terrorist events, which can be particularly important for residential blocks or multi-unit properties.
When selecting a policy, it is important to choose appropriate insurance cover and ensure the policy provides suitable cover for the property and its specific risks, offering comprehensive protection for both the building and its residents.
Insurance Costs, Service Charges, And Recoveries
Several factors influence the premium costs for freeholder building insurance, including the size and age of the property, its location, the type of construction, and any previous claims history. For insurance purposes, it is essential to understand the rationale behind the insurance policy, as this ensures that the insurance costs are accurately assessed and the right level of cover is provided for the property. Service charges typically recover the cost of the building insurance premium from leaseholders, and these charges should be clearly itemized and justified. When apportioning costs among leaseholders, it is important to follow the terms set out in the lease agreement, ensuring that each party pays a fair share based on the agreed formula.
Exclusions and Limitations of Freeholder Building Insurance
While freeholder building insurance offers essential protection, it’s important to be aware of what is not covered under most policies. Typically, building insurance for a freeholder building will exclude damage resulting from general wear and tear, routine maintenance, or gradual deterioration of the property. Issues caused by poor workmanship, design flaws, or pre-existing conditions are also commonly excluded.
Insurance providers often set specific policy limits, which cap the amount payable for certain types of claims or for particular elements of the property, such as permanent fixtures or specialist fittings. Some policies may also exclude coverage for events like flooding or subsidence unless additional cover is purchased. It’s crucial for freeholders to thoroughly review their insurance documentation to understand these exclusions and limitations, ensuring there are no surprises in the event of a claim. By being aware of what your building insurance does and does not cover, you can make informed decisions about whether additional or specialist insurance is needed to fully protect your property.
Benefits of Freeholder Building Insurance
Freeholder building insurance provides a wide range of benefits that help safeguard both your property and your financial interests. One of the primary advantages is financial protection against damage to the physical structure of the building, whether from fire, storm, or malicious damage. This ensures that costly repairs or rebuilding work can be carried out without placing a significant financial burden on the freeholder.
Another key benefit is liability protection. If someone is injured on the property or if there is accidental damage to a third party’s property, the insurance can cover legal costs and compensation, helping you meet your legal obligations as a property owner. In situations where the building becomes uninhabitable due to an insured event, freeholder building insurance can also cover the cost of alternative accommodation for residents, providing peace of mind during difficult times.
By securing adequate cover, freeholders can be confident that their investment is protected against unforeseen events, and that they are fulfilling their responsibilities to leaseholders and other stakeholders. Ultimately, having the right building insurance in place is an essential part of responsible property ownership.
Arranging Freeholder Building Insurance
Arranging freeholder building insurance involves several important steps to ensure you have the right level of protection for your property. Start by determining the rebuild value of your building, as this will form the basis for the amount of cover you need. It’s also important to consider whether you require additional types of insurance, such as contents insurance for communal areas or liability insurance for accidents involving third parties.
When choosing an insurance provider, look for a specialist insurance company with experience in freeholder building insurance. Review the insurance policy carefully, paying close attention to policy limits, exclusions, and any conditions that may affect your cover. Make sure the policy meets your legal obligations as a property owner and provides suitable protection for the specific risks associated with your property.
Comparing quotes from different insurance providers can help you find the most comprehensive and cost-effective policy. Don’t forget to consider the provider’s reputation, customer service, and claims handling process, as these factors can make a significant difference if you ever need to make a claim. By taking a thorough and informed approach, you can secure the right freeholder building insurance to protect your property and your interests.
Claims Handling And Dispute Resolution
To notify a claim, freeholders should promptly contact their insurer with all relevant details and documentation. It’s important to note that freeholders, particularly in multi-unit buildings, may encounter a complex claims process due to the involvement of multiple parties and properties. Seeking support from an experienced in-house claims team can help guide you through these detailed steps and ensure your claim is handled efficiently.
If you need to escalate a claim or resolve a service charge dispute, check your policy for escalation procedures. Some policies offer only one excess per claim, which means you pay a single deductible regardless of the number of units affected—this minimizes out-of-pocket costs for freeholders and simplifies the claims process. Always consult your insurer’s in-house claims team for guidance on next steps and dispute resolution.
Frequently Asked Questions About Freeholder Building Insurance
Yes, the freeholder is usually responsible for insuring the building itself. This means the structure, including the roof, walls, and permanent fixtures, is covered under the freeholder building insurance policy. However, this building insurance does not cover personal belongings or the contents inside individual flats. Leaseholders should be aware that they need separate contents cover to protect their own possessions, as building insurance does not include contents cover for personal belongings.
Leaseholders typically contribute to the cost of the building insurance through their service charges. It’s important for leaseholders to arrange their own contents cover for their personal possessions, as the freeholder’s policy only covers the building structure and not individual contents.
If there are joint freeholders, the insurance claim payments are usually made to all named parties or as specified in the policy.
Conclusion – Let Emerald Help You For Your Freehold Insurance
Share of freehold insurance is a crucial aspect of property ownership, providing protection against damage or loss to the building and common areas.
Property owners should carefully review their insurance options and policy documents to ensure they have the right cover in place.
By understanding the different types of insurance available, property owners can make informed decisions and save money on their insurance costs.
It is essential to work with a reputable insurance provider to ensure the best cover and service.
Emerald has been covering freeholders for a long time and has a super level of expertise. With trained customer agents, high customer reviews and a high level of satisfaction, we aim to meet your needs and we hope that we can help you.
Starting is simple – just call us on 0330 113 7109 or email us on customerservice@emeraldlife.co.uk and we would love to hear from you.
