Buildings insurance on a leasehold flat, who pays and what to check

When you buy a leasehold flat, you own the space inside your four walls for the length of your lease. The building itself, the roof, the external walls, the communal staircase, all of that belongs to the freeholder. Because you can't insure something you don't own, the freeholder takes out a single policy covering the whole block.

This actually makes sense. Imagine thirty flat owners each arranging their own buildings cover and then trying to agree whose insurer pays when a pipe bursts in a shared wall. One policy, one claim, one insurer. Cleaner for everyone.

Your lease will almost certainly require the freeholder to maintain adequate buildings insurance and to rebuild the property if it's destroyed. That obligation sits with them. Your obligation, buried a few pages later in the same lease, is to contribute to the cost. That contribution arrives in your service charge.

The freeholder or their managing agent pays the annual premium to the insurer. They then recover it from leaseholders, usually split according to a formula set out in the lease, often by floor area or simply divided equally between flats.

Some leases allow the managing agent to add an administration fee on top of the raw premium. This is legal if the lease permits it, but it's worth knowing about. A managing agent who places insurance through a connected broker and earns commission on top of an admin fee is doing nothing illegal, but they are earning twice from your money. The Building Safety Act 2022 introduced rules requiring managing agents to disclose insurance commissions to leaseholders in England and Wales. If you ask for a breakdown and they won't give you one, that's a red flag.

You'll typically see the insurance line as a separate item in your annual service charge accounts. It should show the total premium for the block, not just your share, so you can see what the whole policy costs and work out whether your proportion looks right.

You still need your own contents insurance. The freeholder's policy covers the structure, not your furniture, your clothes, your laptop or your fitted kitchen units if they're considered contents rather than fixtures. The line between fixtures and contents can be blurry, so read your contents policy carefully and ask the insurer directly if something specific worries you.

You should also check whether the freeholder's buildings policy covers accidental damage to the fabric of your flat, for example if you put a foot through the ceiling of the flat below while doing some DIY. Some block policies include this, some don't. Ask the managing agent for a summary of cover, not just the premium figure.

One more thing. If you're renting your flat out, tell both your contents insurer and check whether the block policy requires the freeholder to be notified. Letting a flat without telling the relevant parties can invalidate cover.

Your solicitor should request a copy of the current buildings insurance policy as part of the conveyancing process. Don't let this get buried in the pile of documents. Actually look at it, or at least ask your solicitor these specific questions.

1. 1Is the sum insured a declared value or an index-linked reinstatement figure, and when was it last assessed by a surveyor?
2. 2Does the policy cover terrorism, subsidence and escape of water, or are any of these excluded?
3. 3What is the excess on the policy, and who pays it if a claim relates only to your flat?
4. 4Is there a commission or administration fee being charged on top of the premium, and how much is it?
5. 5Has the insurer or the policy changed in the last two years, and if so, why?

If the sum insured hasn't been reviewed recently, the building could be underinsured. That's not a theoretical risk. If the block burned down and the reinstatement cost exceeded the insured amount, every leaseholder would face a shortfall.

Premium increases on block policies have been significant in recent years, particularly for buildings with cladding issues or those that went through the EWS1 external wall survey process. If you're looking at a flat where the service charge has risen sharply, find out whether the insurance premium is driving it.

You have the right to ask for a written breakdown of service charge costs. Under the Landlord and Tenant Act 1985, as it applies in England and Wales, you can request a summary of relevant costs and, in some circumstances, inspect the underlying invoices. If a premium has doubled, you're entitled to know why.

Ask whether the freeholder or managing agent obtained competitive quotes before renewing. They have a duty to act reasonably. If they've simply auto-renewed with the same insurer year after year without shopping around, that may not meet the standard of a reasonable landlord. You can challenge unreasonable service charges at the First-tier Tribunal (Property Chamber) in England, or the Leasehold Valuation Tribunal in Wales. This is a real option, not just a theoretical one, and it doesn't require a solicitor, though getting advice first is sensible.

If you're buying into a block where premiums have spiked, factor the current service charge into your affordability calculation. Lenders will ask about it too.

Before you even instruct a solicitor, you can spend seven pounds on HM Land Registry's gov.uk service to download the title register for the property. This will confirm whether it's leasehold, show the title number, and often reveal the name of the freeholder. The free property search on the same site tells you only whether the property is freehold or leasehold and its title number, so if you want the detail you'll need to pay for the full register.

Knowing who the freeholder is matters for insurance because the freeholder's track record as a landlord, including how they handle insurance, affects your life as a leaseholder. A large, professional freeholder with a named managing agent is easier to hold to account than an individual who owns one building and responds to emails once a month.

If the lease is short, say fewer than eighty years, that's a separate but related issue. Lenders commonly want around seventy to eighty-five years remaining when you apply for a mortgage, and each lender sets their own minimum, so check with yours early. A short lease affects saleability and remortgaging, and the cost of extending it can be significant. Since thirty-first January 2025, you no longer need to have owned a flat for two years before you can claim a statutory lease extension, which is genuinely helpful for buyers. But if the lease has fewer than eighty years left, marriage value still applies when calculating the extension premium, which pushes the cost up. The Leasehold and Freehold Reform Act 2024 was supposed to abolish marriage value, but that provision is not yet in force and has no confirmed start date as of September 2026, so confirm the current position with your solicitor before relying on it.

Buildings insurance on a leasehold flat isn't your responsibility to arrange, but it absolutely is your responsibility to understand. You're paying for it, you're relying on it, and if it's inadequate or overpriced, you're the one who suffers.

Get the policy details before you exchange. Ask about commissions. Check the sum insured. If premiums have jumped, ask why and ask for proof that the market was tested. None of this is aggressive or unusual. It's just being a sensible buyer.

And if anything about the insurance setup feels off, or if the managing agent is vague or obstructive when you ask reasonable questions, treat that as useful information about what life as a leaseholder in that block will actually be like.