What landlords need to know about buildings insurance for leasehold properties

There are three key areas of insurance to consider as a landlord: buildings, contents and liability. If you have a freehold property, it is entirely your own responsibility to decide on the level of insurance you need and arrange for cover.

However, if your rental property is leasehold, such as a flat in a block, buildings insurance for the property as a whole will usually be put in place and initially paid for by the management company or freeholder.

Buildings insurance for leaseholders will normally cover:

• The cost of a complete rebuild if the building were completely destroyed, e.g. by a fire.
• The cost of repairs to any part of the building (including outbuildings) if it were damaged by subsidence, storms, fire, flood, and burst pipes.
• Repairing damage caused by vandalism or theft, or vehicles and other objects colliding with the building.

The proportionate cost for your flat (normally based on its size as a percentage of the overall internal area of the building) is then reclaimed from you through, typically through regular service charge payments.

If this is the case, it’s well worth checking that the management/freeholder buildings insurance will actually give you the cover you need as a landlord, particularly around:

• Fixtures and fittings. While buildings insurance should cover damage to permanent fixtures, such as kitchens and bathrooms, check to make sure it is included.
• Third-party liability. This relates to damage caused to your property by a neighbouring one, such as water damage from a bath overflowing in the flat above. Some leasehold buildings insurance does not include third-party liability cover. This is particularly important as not all flats actually have a stop cock to turn off the water!
• Alternative accommodation. If the property becomes uninhabitable as a consequence of an insured event, will the policy cover the cost of finding alternative accommodation for your tenants?

What other landlord-specific insurance should I have?

• Contents: If you have provided any furnishings – including carpets, curtains and white goods – it’s sensible to consider having contents insurance that will cover both accidental and malicious damage by tenants.
• Public liability: This protects you in case a tenant, contractor or visitor injures themselves in your property and makes a claim against you.
• Loss of rent: If the property becomes uninhabitable following an insured event, such as a fire or flood, this can replace lost rental income.
• Legal expenses: This cover can protect you against legal costs specifically related to the letting of your property, such as if you need to take legal action against a tenant.

Our own comprehensive landlord insurance includes all this, and if you already have adequate buildings cover via your managed service agreement, we can offer a tailored policy that will cover the rest.

To discuss your requirements and get a quote for insurance that will properly protect you and your leasehold rental property, get in touch with our experts today, by calling 01903 890044, by emailing info@bodeinsurancesolutions.co.uk, or by getting a quote online.