Building Insurance and share of freehold

pred02

Hi,

I live in a 2 bed maisonette which is one of 2 properties in the building. About 6 years ago me and my neighbor bought off share of freehold so we effectively manage the building. It's just two flats. He rents out one of the flats where I live in the top floor one.

We have been arranging for building insurnace (specialist policy as one flat is rented out) and the premiums went from £350 to £800 last year to £1250 this year. We made no claims in last 10 years. If I was to get just building insurnace for my flat it would be c. £250 a year.

Is there a way for us to get separate insurance or do we need specialist building insurance because he rents it flat out? It feels like I am subsidising the premium where as the policy is extra high because it's a rental. 

In the past I did not mind splitting 50/50 but the costs have gone up significantly.

Thanks 

Brie

My understand is that a building needs to be insured under one policy.  That way if the roof blows off it's clear that the whole building benefits from having a roof, not just your flat, and so the one policy sorts it out.  If you had 2 then there would be delays, different terms, 2 deductibles, etc.

eddddy

What do the leases say about insurance responsibility? Is it...

1. The freeholder is responsible for insuring the whole building - with each leaseholder contributing 50% of the cost?
2. Or, the leaseholders are responsible for insuring their own part of the building?

If it's option 1 -

• You have stick with a single buildings insurance policy and contribute 50% of the cost... unless you can persuade the other leaseholder / joint freeholder to do something else.

• Do the leases allow the maisonettes to be rented out? If they do, you have to be prepared to pay for buildings insurance that covers renting out the flats. 

• (If the leases prohibit renting out - you probably don't have to pay increased insurance costs, if your neighbour decides to breach the lease and rent out their maisonette)

But are you sure you have the right type of insurance policy? The type of policy you want is called Block (of flats) insurance.

It sounds like you might have Landlord's insurance - which probably isn't what you want.

eddddy

Brie said:

My understand is that a building needs to be insured under one policy.  That way if the roof blows off it's clear that the whole building benefits from having a roof, not just your flat, and so the one policy sorts it out.  If you had 2 then there would be delays, different terms, 2 deductibles, etc.

Just to address the question of the roof blowing off, if there are 2 separate insurance policies.

It's not really a question of "who benefits".

In those type of leases, it would be clear who is responsible for the roof (and therefore who must insure it).

• Typically, the upstairs maisonette leaseholder would be responsible for the top half of the building - plus the roof...

• ... and the downstairs maisonette leaseholder would be responsible for the bottom half of the building - plus the foundations.

But as you suggest, having one insurance policy is probably better.

pred02

Thanks all. I went through another broker and found a policy that has premium more reasnoble - what we paid last year so will still with block building insurance. 

julietwob

Hi pred02, which broker did you use? We're looking renew our insurance and the costs are astronomical. Thanks!