Leasehold buildings insurance

[Chadwick92]

Hi all,

I own a leasehold flat. The freeholder owns the property above - the building/house is split into a ground floor (mine) and first floor flat (the freeholder’s).

It is the freeholder’s responsibility to take out buildings insurance for the whole building for which I reimburse them for my flat. They have always taken this out in the form of landlords insurance, in their name. They have a separate policy for their flat.

It’s however come to my attention from reading the policy that I’m not sure this buildings insurance covers my fixtures and fittings in my flat, as the policy states it covers ‘fixtures and fittings that are your property’. Given the policy is in their name and I own all the fixtures and fittings in my flat - i.e. none of them are shared between us, does this mean I’m not covered for my fixtures and fittings? Has anyone had similar experiences and can shed light on this? Do I need additional cover for my fixtures and fittings? I have contents insurance for my furnishings but obviously this wouldn’t cover fixtures and fittings. Or is there something I need to look out for in the lease to see if this would include my fixtures and fittings?

I’ve noticed it does also state in our lease that the insurance should be taken out in the joint name of the landlord and the tenant. Is this even possible to do with insurance though?

Thanks

[AndrewDod]

What do you mean by fixtures and fittings.

If you mean your wallpaper, possibly flooring, plaster on walls, then maybe covered by L's policy depending on your lease. If you mean your fancy lighting fixtures, fridge, fitted kitchen, toilet, possibly carpets, you need your own insurance.

See how lease defines "the building"

[SouthernDave]

This is standard. The freeholder insures the building, nothing more.
so if your building burnt down, the insurance would pay for it to be rebuilt (assuming you had the reinstatement cost correct… many don’t and underinsure the building) but your kitchen, bathroom, carpet etc would not be put back. The building insurance would rebuild the structure and walls, but then you would claim on your own policy to reinstate the bathroom, kitchen, flooring etc. your contents cover would then pay out for belongings like tv, microwave, oven etc

[Gordon999]

The contents inside the flat belongs to the leaseholder or rental occupier, who would insure under a "contents policy" .

[Sydaton]

This is standard. The freeholder insures the building, nothing more.
so if your building burnt down, the insurance would pay for it to be rebuilt (assuming you had the reinstatement cost correct… many don’t and underinsure the building) but your kitchen, bathroom, carpet etc would not be put back. The building insurance would rebuild the structure and walls, but then you would claim on your own policy to reinstate the bathroom, kitchen, flooring etc. .............

With respect, I don't think that that is correct.

I don't think it is common for building insurance to exclude bathrooms and kitchens. I would expect interior fittings such as baths, kitchen units and toilets to be included in flats insurance.

I don't have separate policies for the couple of flats I own - I rely on the buildings insurance to cover the cost of rebuilding the flats were the block to burn down. Not that my taking the view I take means I am right but a quick look on insurance sites suggests that the interior fittings are included generally in the cost of rebuild and hence the cover.

[SouthernDave]

With respect, I don't think that that is correct.

I don't think it is common for building insurance to exclude bathrooms and kitchens. I would expect interior fittings such as baths, kitchen units and toilets to be included in flats insurance.

I don't have separate policies for the couple of flats I own - I rely on the buildings insurance to cover the cost of rebuilding the flats were the block to burn down. Not that my taking the view I take means I am right but a quick look on insurance sites suggests that the interior fittings are included generally in the cost of rebuild and hence the cover.

Best to check… it’s definitely not the case on the several flats we own. We have separate polices that ‘top up’ the buildings insurance that is maintained by the management company because the policies they have are pretty basic.

[AndrewDod]

With respect, I don't think that that is correct.

I don't think it is common for building insurance to exclude bathrooms and kitchens. I would expect interior fittings such as baths, kitchen units and toilets to be included in flats insurance.

I don't have separate policies for the couple of flats I own - I rely on the buildings insurance to cover the cost of rebuilding the flats were the block to burn down. Not that my taking the view I take means I am right but a quick look on insurance sites suggests that the interior fittings are included generally in the cost of rebuild and hence the cover.

It is actually a very difficult area with no clear path. It is not within the demise of the FH, and thus not really his to insure.

Yes buildings policies in general often include fittings as part of the building, but the fact that a policy covers something (even if it does), does not mean FH is obliged to claim under that policy for LH's gold-plated toilet or marble worktop or £40K kitchen of which he is unaware.
Unless of course the lease says that this is an obligation of FH. Even if the building burns down and is reinstated FH could just reinstate to something similar to that provided in the initial build, not what LH actually has right now. Lessees would not be differentially reimbursed depending how fancy their kitchens were.

This is how one insurer discusses the problem (not advertising them)
http://www.quotelinedirectblog.co.uk...ies-for-flats/

And many policies do not cover these things anyway.

But it creates a further difficulty that if contents insurance does cover fixtures (many do for this reason) the element of duplicated insurance presents a problem.

[SouthernDave]

Quick copy from a website I found…
this policy is designed to cover leaseholders own fitted permanent fixtures and fittings. Such as kitchen and bathroom, not insured under the block buildings insurance, insured by the freeholder or management company

[eagle2]

I recommend that you ask the insurance company to note your interest in the policy.

[AndrewDod]

I recommend that you ask the insurance company to note your interest in the policy.

But it may be (or may not be) quite wrong for a leaseholder to claim for a new kitchen (where everyone else in the block will effectively claim for that new kitchen via higher premiums) where that kitchen is not the freeholder's OBLIGATION to insure. An "interest" in the policy can only extend to what the lease says is that interest.

There is an issue -- but that is largely down to the insurance industry which does not seem to want to offer appropriate products.

[SouthernDave]

But it may be (or may not be) quite wrong for a leaseholder to claim for a new kitchen (where everyone else in the block will effectively claim for that new kitchen via higher premiums) where that kitchen is not the freeholder's OBLIGATION to insure. An "interest" in the policy can only extend to what the lease says is that interest.

There is an issue -- but that is largely down to the insurance industry which does not seem to want to offer appropriate products.

I am certainly not a fan of insurance companies. They made an enemy out of me when they refused to pay out full value on a brand new (less then 6 weeks old) van that got stolen. I am therefore always on the lookout to engineer any outcomes within my control so it costs them more money.
however, to be fair to them and for reasons you have already mentioned above, it seems sensible that a block insurance would not cover leaseholders fixtures and that they should be insured via their own personal policies.

[flyingfreehold]

I think you have an insurable interest under the policy taken out by the other flat owner. Best thing you can do is to request your interest be noted on the schedule as an interested party in the cover.

[flyingfreehold]

kitchen reinstatement would be included if lost in a fire, for example