Insurance
Who is responsible for insuring the building?
This depends on the type of lease you have. The vast majority of leaseholders are using the standard Council form of lease. This applies to those leaseholders who bought their flat via the Right to Buy scheme or any leaseholder who has purchased the flat subsequently.< /p>
For this type of lease, the leaseholder is responsible for insuring their flat (defined as the “demised” premises in your lease). This usually includes the fixtures and fittings inside the property, for example, fitted kitchen units as well as the plastering, flooring, skirting boards, doors, electrics, gas and water supplies within the flat, partition walls, window glass etc. Please see the lease for the full definition of the “demised premises”.
We, as the freeholder, are responsible for insuring the common parts of the building (defined as the “reserved” premises in your lease). This usually includes the roof, foundations and communal areas of the building. Again, the full definition of the term “reserved premises” can be found in your lease.
Why do I need buildings insurance?
Your property is a valuable possession. If it is damaged, for example by a fire, you would have to pay all the cost of the repairs to the demised premises. If you did not have insurance, this could amount to many thousands of pounds. Depending on the wording of your policy, your insurance may also pay for the cost of alternative accommodation if you were unable to live in the property until repairs are carried out, loss adjuster’s fees, legal expenses, site clearance, demolition etc.
If damage is caused in another part of the building, for example from a leaking water pipe in your property, you may face a claim against you from the resident of the affected property or from the Council. Again, depending on the actual wording, your buildings policy may include public liability cover which could pay your costs in the event that a neighbour takes you to court.
So, as you can see, buildings Insurance is not just for paying for repairs to your property. Without insurance, you would have to pay for the repairs and these additional costs yourself.
In addition, it should be borne in mind that when you signed your lease you gave an undertaking (a covenant) to keep your property insured.
If you do not do this you have broken the terms of your lease. The Council, as freeholder, gives a similar undertaking for the common parts of the building.
Are all repairs covered by building insurance?
No, your policy only covers you for the perils listed in the policy document. It is not a maintenance contract. The insurers will expect you to keep your property in good order and so, for instance, you will not be able to make a claim for repairs needed due to general wear and tear or damage caused by a long term, unaddressed repair such as a leaking overflow.
If damage to the common parts of the building is caused by a standard insured 'peril', then the cost of repairing them will be covered by the insurance arrangements provided by the Council.
Can I choose the company I want to insure my property?
Yes. The lease says that you can insure with any 'reputable' insurer. We recommend that you obtain quotes from several different companies to compare the prices. Please be aware that the lease requires you to insure in the joint names of yourself and the Council, although, as this is becoming increasingly difficult to do, the Council would accept an arrangement whereby its interest as the freeholder or lessor is noted on the policy.
Whilst not a requirement of your lease, you may also want to consider insuring the contents of your home with the same company as there will usually be a discount when you buy more than one type of policy from them.
We choose and arrange the insurance for the common parts of the building. You pay towards the cost of this insurance in your service charge.
Can I use the same insurance company as the Council?
Not at present. The current insurer specialises in large block policies rather than small individual ones.
Alternative forms of lease
1. Shared Ownership
The Council insures the entire block. The premium is divided equally between all the flats in the block and the leaseholders pay their contribution towards the buildings insurance within their service charges.
2. Miscellaneous Leases
Some leasehold properties have been acquired by the Council due to boundary changes in the borough or have been sold back to the Council for various reasons. In these instances, the insurance arrangements will be as per the original lease wording.