What is flat insurance and do you need it?

Key points:

• Damage or destruction because of fire, storms, water or subsidence are just some of the areas insurance may cover

• In England the freeholder of a property arranges buildings insurance, while leaseholders will contribute towards the overall cost through a service charge

• Contents insurance is also optional and can help protect your belongings from damage or theft

• Contents insurance should be arranged by the occupant of the flat, whether they are a leaseholder, freeholder or tenant

• Insurance covering communal areas such as gardens or stairs is usually included in the buildings cover arranged by the freeholder of a property

What is a freeholder, a leaseholder and are the rules different in Scotland?

In England:

• The freeholder owns the building and the land it sits on outright. The freeholder is almost always legally responsible for arranging a buildings insurance policy that covers the entire physical structure, including the roof, outer walls and communal areas

• The leaseholder owns the right to occupy the flat for a fixed term (e.g. 99 to 999 years) subject to a lease. Leaseholders generally do not arrange their own buildings insurance; instead, they contribute towards the freeholder's block policy via an annual service charge.

• The tenant rents the flat from a leaseholder or freeholder. Tenants have no responsibility for the building's insurance and only require contents insurance for their own possessions.

In Scotland:

• There is no 'freeholder' or 'leaseholder'. When you buy a flat in Scotland, you are the outright owner (or heritable proprietor) and you hold a shared, legal interest in the building's common parts, such as the roof, foundations and stairwells.

Do you need home insurance to buy a flat?

A mortgage provider will request evidence that buildings insurance is in place and, if you’re a leaseholder, one of the conditions of your contract may be that you have buildings insurance.

If you own your flat, buildings insurance is designed to help protect the structure of the property against certain risks. Renters don’t need to take out buildings insurance as this is up to the landlord or property owner.

Contents insurance can cover your belongings if something unexpected should happen such as a fire, flood or theft, up to your chosen policy limits. 

What does buildings insurance cover in a flat?

Buildings insurance is designed to cover the physical structure of your flat, which typically includes things like the doors, windows, fixtures and fittings.

Every policy is different but many will cover the cost of repairs or replacing something if it’s been damaged or stolen. This can include if there’s been a water leak, a fire, a storm, falling trees or subsidence.

In the worst-case scenario the cost of rebuilding your flat may also be covered. All policies are different so it’s important to read the small print so you know how much cover you have.

If my flat is leasehold, do I need buildings insurance?

You’ll need to speak to the freeholder and check your contract as usually (but not always) they’ll arrange and cover the buildings insurance costs. 

If this is the case, you may be paying a service charge, with some of this money going towards the insurance premiums. 

However, they won’t arrange contents insurance, so if you want to help cover your belongings, you’ll need to purchase it.

If I have a share of a freehold flat, do I need buildings insurance? 

If you own a share of a freehold flat, you and the other owners will be responsible for arranging and paying for buildings insurance for the whole property. 

This is usually arranged between all of the freeholders and you all split the costs - rather than one person setting up the policy on their own.  

Are communal areas covered?

Communal areas such as the garden, stairs and corridors are usually covered by the entire property’s buildings insurance. 

This is usually arranged by the freeholder if it’s a leasehold flat or the freeholders jointly if they’re co-owners of the property.

Do I need flat insurance if I am renting? 

You don’t need to take out buildings insurance if you’re renting a flat, but you may want to buy contents insurance.

It can help cover your belongings - things you can take with you, including valuables up to a certain limit. For an extra cost, you can also add personal possessions cover so your items are protected when you’re away from your flat too.

Get a home insurance quote with John Lewis Money

John Lewis Money offers buildings and contents insurance for flats in Scotland, as well as contents insurance for flats in England, to cover your belongings.

This article is for promotional or information purposes only. You must not rely on it as advice.