Freeholder Building Insurance: An Ultimate Guide

Introduction

Having the right insurance for your freehold property is essential to protect your asset. This guide will provide useful information on what freeholder building insurance is, why it’s important and how to choose the right policy for your needs.

What is Freeholder Building Insurance?

Freeholder building insurance provides cover for the building structure and common parts of a freehold property that you own, such as hallways, stairwells and the exterior walls. It is a legal requirement for freeholders to have adequate buildings insurance in place.

Why You Need It

There are several important reasons why freeholder building insurance is necessary:

Covers repairs: If the building suffers damage from events like fires, floods or storms, the policy pays for repairs.
Covers legal liability: You’re protected if someone is injured in a common area and makes a claim against you.
Mortgage requirement: Most lenders require it to be in place for the duration of the mortgage.
Satisfies lease terms: Having adequate cover meets terms in most leases.
Protects your investment: The policy safeguards the value of your property asset.

Choosing the Right Cover

When choosing freeholder building insurance, you need adequate cover for rebuilding costs. Make sure your policy includes:

Cover for the full rebuilding cost
Accidental damage
Cover for property owner’s liability claims
Loss of rent payments

Also check if cover extensions are available, like protection for subsidence or terrorism.

Top Tips for Buying Freeholder Insurance

Follow these useful tips when getting quotes and choosing your policy:

Accurately calculate rebuilding costs using an online calculator
Get quotes from multiple specialist insurers
Check policy limits and excesses
Ensure cover includes liability protection
Review policy wording carefully
Arrange cover before completion if buying the property
Consider taking out separate contents insurance

FAQ

What does a freeholder own?

A freeholder owns the land and building structure. They are responsible for insuring and maintaining all common areas.

Who arranges the insurance?

The freeholder is responsible for arranging adequate building insurance for the whole property.

What happens if I don’t insure the building?

You would breach the terms of your mortgage and any lease agreements. Plus, you risk substantial financial losses if the building is damaged.

Am I liable for injuries in common areas?

Yes – as the property owner you can be held legally liable for injuries from hazards. Freeholder insurance covers liability claims.

Does contents insurance also cover the building?

No – contents insurance only covers your possessions inside. To insure the physical building structure you need freeholder building insurance.