As a freeholder, RMC (Resident Management Company) director, or leaseholder, you’ll be well aware that managing a block of flats is no easy task. Block property maintenance and management is more than just collecting service charges and carrying out repairs.
One of the most important responsibilities of freeholders and RMCs is ensuring the safety of your property and its residents. That means carrying out routine maintenance, following fire safety measures, and, importantly, ensuring you have the right insurance for your block of flats.
As a landlord or block manager, having building insurance for your block of flats has to be a priority. Without insurance, you’re at risk of facing a hefty fine for non-compliance. And on the same note, failing to comply with basic safety measures and improper maintenance will make it harder for you to obtain competitive building insurance.
If you’re struggling to keep on top of your property management duties and feel overwhelmed by insurance requirements, connect with us at Habitare for end-to-end block management services. Our block managing agents are here to help with proactive repairs, reminders for renewing your policies, and proper documentation that makes it easy to obtain high-rise building insurance.
What is Block of Flats Insurance & Why Is It Necessary?
First, you might be wondering how insurance for a block of flats differs from a standard home insurance.
Block of flats insurance is a special type of building insurance that covers an entire residential building that has been divided into individual flats or apartments. It’s usually arranged by the freeholder, RMC, or RTM Company, but can also be arranged by a managing agent on behalf of the leaseholders.
Your standard home insurance, which is usually taken out by homeowners or renters, includes everything in their individual flat space, such as internal fixtures and personal belongings. It may also include liability cover and optional add-ons like accidental damage or emergency repair services, but only within the private confines of the insured property.
Building insurance for apartment blocks covers the entire exterior structure of the apartment block (the roof, walls, floors, and any permanent fixtures or fittings), including communal areas such as stairwells, lifts, and gardens. It also often includes cover for outbuildings, underground pipes and cables, internal communal corridors, and sometimes, landlord property in the communal areas.
As a RMC director or RTM company, building insurance for flats is more than a safety net; it’s a legal requirement. Under the Leasehold Reform, Housing and Urban Development Act 1993 and the property management structure, freeholders, RMCs, and RTMs are required to insure their buildings and ensure all the leaseholders have access to policy information.
Your property’s lease will likely outline that the building must be insured for its full reinstatement value, including demolition, debris removal, and professional fees if rebuilding is needed following a major incident.
Having building insurance for your apartment block can also help protect freeholders and leaseholders against expensive legal disputes and provide financial assistance in the case of an accident. Unless there’s deliberate sabotage or the accident occurred due to mismanagement or non-compliance, the cost of repairs will be covered by the insurance company.
Common Risks To Be Covered By Insurance
If you’re a freeholder, leaseholder, or RMC director, before you take out building insurance, you’ll want to spend some time comparing the different block of flats insurance options. Shopping around will help you find the best rates and the maximum coverage.
In some cases, you might decide to take out extra coverage for natural disasters, accidental damage, alternative accommodation, and legal and liability protection for some added protection.
Here are some common risks that must be covered by building insurance for blocks of flats:
1. Fires and explosions
2. Flooding or storm damage
3. Theft, vandalism, and forced entry damage
4. Subsidence and ground movement
5. Burst pipes or water leaks
6. Falling trees
7. Damage caused by vehicle collisions
That’s not all. Building insurance for a block of flats should also cover external property, like fences, gates, satellite dishes, and communal lighting. If you have a larger apartment block, you’ll also want to get cover for lifts, shared heating systems, and roof structures.
Remember that the more items you cover, the less likely you are to be expected to pay out of pocket when something goes wrong.
Types of Insurance for a Block of Flats
A 2024 study revealed that there are 35 million home insurance policies in the UK, but leaseholders and freeholders are often unsure of what kind of insurance they may need for their property.
Here are four of the most popular freeholder blocks of flats insurance options to consider:
1. Property Owner’s Liability (POL) Insurance
This insurance will protect you if someone is injured on your premises or their property is damaged due to an issue in your building. It covers the cost of legal claims and compensation.
2. Emergency Assistance Cover
Let’s say your tenant calls you at midnight because the water heater has burst or their lock is broken. Emergency assistance cover is incredibly useful for situations like these, giving you round-the-clock access to plumbers, electricians, and locksmiths so you can handle an emergency quickly.
3. Alternative Accommodation Cover
If there’s a gas leak in one of your apartments or you’ve discovered a serious mould issue, you may need to rehome your tenants until the problem is solved. This can prove expensive – that is, unless you have Alternative Accommodation Cover.
4. Lift Insurance and Inspections
If your block has a lift, you should consider getting it insured. This insurance will cover malfunctions or breakdowns in your lifts and includes coverage for regular inspections, so you can make sure your lift complies with all safety regulations.
If you’re a first-time property owner or RMC director, building insurance for an apartment can feel overwhelming. Partner with Habitare’s experienced block managers for complete assistance.
Things To Consider When Buying Building Insurance for Flats
Here are a few things to consider when you’re sorting building insurance for a block of flats:
- It’s worth getting coverage for a rebuild cost assessment, so the insurance will cover the full cost of rebuilding and not just pay you the market value.
- There are different types of covers when you lease out, sell, or have vacant apartments in your building block. Make sure your policy covers them.
- Always be mindful of all amenities and shared areas on your property while you’re shopping for insurance so you can cover these, too.
- If your apartment building is over 10 storeys, it may require extra fire safety provisions and structural assessments.
Our experienced team is just a call away. We’re more than happy to help you compare block of flats insurance and reach the best-suited decision.
When Can My Insurance Be Denied and What Are the Exclusions?
It’s essential that you understand the exclusions of your insurance since these can lead to claims being denied in a lot of cases.
One of the most common reasons for a claim being denied is underinsurance. If the rebuild cost of the property has been underestimated, you might get a lower payout than you were expecting. Or, if you haven’t disclosed existing damage or previous claims, that may lead to your claim being rejected outright.
Additionally, if you have damage due to wear and tear and lack of maintenance, this won’t be covered under your policy. If you’re not sure whether your current policy offers enough protection, Habitare can help. Our block agents can assess your existing arrangements and recommend any updates that will improve your coverage and help you save money.
Contact Habitare For Customised Block Management
When you own or manage a block of flats, you have to be ready for the unexpected, and your building insurance should be your first line of defence in case of any issues.
At Habitare, we specialise in custom block property management services, including support with adequate building insurance. We can also help you reduce the likelihood of an insurance claim by undertaking proactive maintenance and repairs to reduce the likelihood of accidents on your property.
Our team is here to remind you whenever your insurance policies need renewal, and we’re happy to manage your paperwork for an easy claim and renewal process.
We partner with leading insurers, surveyors, and legal advisors to ensure your property is not only compliant but also financially safe.
Get in touch with us to learn more about our services.