Who Pays for Buildings Insurance in a Leasehold Flat?

Key things to know

1. In a leasehold flat the freeholder normally arranges buildings insurance for the whole building, and leaseholders pay their share through the service charge.
2. The block policy covers the structure and common parts against risks such as fire, flood, storm and subsidence, but not wear and tear.
3. Contents, and often internal fixtures and fittings, are your responsibility, so you may need your own contents policy.
4. You can ask your landlord for a summary of the insurance policy and the paperwork behind your service charge.
5. If a flat is empty for 30 days or more, cover can shrink or the excess can rise, so tell your freeholder.

Buildings insurance for a leasehold flat does not work the way it does for a house. Your freeholder arranges one policy for the whole building, and you pay your share through the service charge. The setup surprises many flat owners, partly because it works so differently from houses and partly because the block policy covers less than most people assume. Here is how it works, what it covers and where the gaps sit.

Why Flats Are Different from Houses

When you buy a leasehold flat, you buy the right to live in the property for the length of the lease, not the structure it sits in. The walls, roof and shared stairwells still belong to the freeholder. Because a fire or an escape of water can spread from one flat to the next, it makes sense for a single policy to cover the whole building, shared areas included, rather than for each leaseholder to insure their own slice.

That is why leases for flats almost always make the landlord responsible for arranging buildings insurance, with leaseholders contributing through the service charge. Leasehold houses work the other way round: you will usually arrange buildings insurance yourself, although your lease may set its own conditions, so check the terms.

Buildings insurance is not required by law, but it is normally a condition of the lease, and mortgage lenders expect it too. If the split between what insures the walls and what insures your belongings is new ground, our guide to buildings versus contents insurance explains where one stops and the other starts.

The Freeholder’s Duty to Insure the Building

Your lease should spell out who insures what. In the usual arrangement, the freeholder must keep the building insured and recovers the premium through the service charge. If your landlord is responsible under the lease and fails to arrange cover, they are breaching its terms. Write to them first, explain the gap and ask for cover to be arranged. If that goes nowhere, you can apply to a tribunal, which can appoint a manager to take over the running of the building.

Councils that act as freeholders describe the duty plainly: the cover is mandatory and leaseholders cannot opt out. Premiums are usually based on what it would cost to rebuild the property rather than its market value, with the rebuild figure assessed or updated by a surveyor. Larger landlords typically hold one block policy across many properties, which gives them bargaining power a single building cannot match.

How You Pay Through the Service Charge

The premium lands in your service charge. Some freeholders bill it annually, others spread it across monthly payments. As an illustration only: where a lease divides the cost equally between the flats, each service charge statement shows an insurance line equal to that flat’s share of the block’s annual premium. The real figure depends on the policy and on how your lease divides costs between flats.

Two other charges can appear alongside it. Some buildings have a reserve or sinking fund for large repairs such as a new roof, and money you pay in is generally not returned if you sell. And when major works push costs past a set threshold, your landlord must consult you first through what is known as a Section 20 consultation; if that step is skipped, the amount you can be made to pay is capped.

If you think a charge is unreasonable, you may be able to apply to a tribunal rather than simply withholding payment. A landlord can take you to court for charges you are responsible for, so use the formal route.

What the Block Policy Usually Covers

A block policy covers the structure of the building and the common parts. The typical list of insured risks includes fire, escape of water, storm, flood, subsidence, fallen trees and vandalism. Policies for blocks often include occupiers’ liability too, and employer’s liability where the freeholder employs staff such as cleaners or caretakers. Among claims made on block policies for flats, escaping water tops the list.

What the policy does not do is pay for damage that builds up gradually. Wear and tear, including a part of the building that has simply reached the end of its useful life, sits outside cover. And if damage arises from something that was never an insured risk, the insurer will not pay even if it is not specifically listed as an exclusion.

Block policy usually covers	You usually arrange yourself
Structure, roof and shared areas	Contents and personal belongings
Fire, storm, flood, escape of water, subsidence, vandalism	Internal decorations and fittings inside your flat
Occupiers’ and employer’s liability, often	Landlord insurance if you let the flat out

The exact wording decides a great deal. Our guide to home insurance terms to know covers the vocabulary you will meet in a policy summary, and subsidence in particular is often misread; see our explainer on whether home insurance really covers subsidence.

What You Still Need to Arrange Yourself

Contents insurance is your job. The block policy does not cover furniture, electronics or anything else you would take with you if you moved, and freeholders say plainly that leaseholders should arrange their own contents cover. For flats, internal fixtures and fittings often fall outside the block policy as well.

Do not buy a second buildings policy, though. Council freeholders advise against it, because it duplicates cover you already pay for through the service charge.

A few exclusions catch leaseholders out. If a property stands empty for 30 days or more, cover can be affected: one council warns that parts of the policy are invalidated, with malicious damage and water escaping from pipes no longer covered, while another raises the standard claim excess from £50 to £250 for unoccupied homes. Fences and boundaries are excluded from some block policies to keep premiums down, and alternative accommodation is not always included if the building becomes uninhabitable. If you let your flat out, damage caused by tenants, deliberate or accidental, is not covered, which is why landlords buy separate landlord insurance.

Worth doing: Ask for the block policy summary before you buy any cover of your own. Knowing where the building policy stops is the only reliable way to fill the gaps without paying twice for the same risk.

Asking to See the Policy and the Premium

You have rights here. If you pay a service charge, you can ask for a summary showing how it is worked out and what it is spent on, along with supporting paperwork such as receipts, and you can ask specifically for a summary of the insurance policy. Some freeholders send insurance certificates out with the annual service charge estimates, and copying the full policy may attract an administration fee, which one council sets at £30.

Use those rights. The Financial Conduct Authority found that buildings insurance premiums across the leasehold sector rose by 125% on average between 2016 and 2021, and by 187% in buildings with fire safety issues. It also found broker commissions up 46% over three years, with nearly £80 million passed to third parties, often shared with managing agents and freeholders, which gave those parties a reason to favour pricier policies. Following a consultation, the FCA announced rule changes on 29 September 2023 to improve disclosure and value for leaseholders.

Shared Freehold and Leasehold Reform Basics

Where leaseholders between them hold a share of the freehold, the group as a whole must arrange the cover and split the cost. A small company managing one building lacks the bargaining power of a large portfolio, so quotes can look higher. Ways to trim the premium include arranging a block policy through a managing agent, agreeing a higher excess for common claims such as escape of water, or taking over the outgoing landlord’s policy if the insurer agrees.

Change is coming from above as well. The Leasehold and Freehold Reform Act 2024 will bring standardised service charge documentation to almost five million leaseholders in England and Wales, spelling out clearly how charges are calculated and spent.

If you cannot remember the last time you saw your block’s policy summary, write to your landlord or managing agent and ask for one, along with the paperwork that supports it.

Questions answered

Do I need my own buildings insurance if I own a leasehold flat?
Usually no. The freeholder insures the whole building and recovers the cost through the service charge, and councils acting as freeholders say you should not take out a second buildings policy.

Can I see the insurance policy I am paying for?
Yes. If you pay a service charge you can ask for a summary of the insurance policy, along with supporting paperwork such as receipts. Some freeholders charge a small administration fee for a copy of the full policy.

What happens if my freeholder does not insure the building?
If the lease makes your landlord responsible, failing to insure is a breach of its terms. Write to them first, and if that fails you can apply to a tribunal, which can appoint a manager to run the building.

Does the block policy cover my belongings?
No. Contents and personal belongings are never included, and internal fixtures and fittings often fall outside it too, so leaseholders are advised to arrange their own contents cover.