Do I need landlord insurance for a flat?
By Alan Boswell Group
Do you need insurance to rent a flat?
While it’s not a legal obligation, it’s likely the minimum level of cover your mortgage provider will require you to take out is landlord building insurance. However, the type of policy you require is dependent on what you own. If you don't own a flat and are still unsure if you need insurance for your property read why you need landlord insurance cover. When we imagine becoming a landlord, we generally think of buying and letting out a house that we own outright and are entirely responsible for.
In truth, many rental properties are flats, either in purpose-built blocks or in converted houses. In some cases, the landlord may own freehold and then rent out the flats as individual units. In others, they may have bought a single flat in the property, without owning the building as a whole. If you buy a flat in a building, then technically you are a leaseholder rather than an owner. The building is owned by another party, who has the freehold.
A brief introduction to leaseholds and freeholds
As a leaseholder, you will pay a fee to the owner of the freehold, sometimes called a service charge. This tends to be your contribution towards the upkeep and maintenance of the building outside of your flat. This may include the cleaning and supply of electricity to shared areas, such as landings and corridors, looking after shared outdoor areas such as gardens, steps and pathways, lift maintenance, roof repairs and so on. Its important to understand the laws around your leasehold. Once you know the type of lease you have, you can then get quotes for leasehold buildings insurance or freeholder insurance. Our guide further explains who is responsible for buildings insurance on a leasehold property, handy to know before you start obtaining quotes.
Who is responsible for buildings insurance on a flat?
As the freeholder is responsible for looking after the building as a whole, it follows that they are also responsible for taking out buildings insurance. This is normally the main aspect of landlord insurance. It is definitely worth checking that you are covered by the freeholder's building insurance to make sure this is the case. However, as a general rule, if you own the leasehold on a flat but not the freehold on the building, you do not need to take out building insurance for flats.
Buy buildings insurance for landlords
In some cases, leaseholders get together to buy the freehold. If you do this, then it follows that you also need to buy buildings insurance as a group. The fine details can be ironed out between the flat owners and your insurance broker.
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Protecting your contents
There is more to landlord insurance than building insurance and you need to make sure you are covered in every other respect. For instance, if you are a leaseholder, make sure you have the correct level of contents insurance. This should cover all fixtures and fittings as well as any furniture you provide with the flat. You do not have to insure the tenants’ property, but it is worth reminding them that this is their responsibility.
If you do not have buildings insurance, you will need contents insurance for basic fittings that would normally be included with buildings cover, such as curtains, worktops and internal doors. This means contents insurance is necessary even for unfurnished flats. Also be aware that your flat and its contents are vulnerable to damage from other flats – for example, water leaks. It is advisable to take out both landlord and employers liability (if you have employees) insurance as add-on products if they are not included as standard.
These will cover you in the case of legal action from tenants, visitors or contractors if they are injured on your property. Legal expenses cover, rent guarantee and home emergency cover are also available and are as valuable to a leaseholder-landlord as they are to a landlord who owns their property outright. To make sure you have the right insurance for your flat, give us a call on 01603 216399 or get a quote online. We'd be happy to help.