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Why do you need a block of flats insurance?
Block of Flats Insurance is exactly what it sounds like, it covers multiple residences within one building. Insurance companies consider a “block” to be anything from a house converted into two flats to a purpose-built facility of 30 residences.
If you own a block of flats, you are subject to more risk than someone who owns a single detached dwelling, so you need a dedicated insurance policy to cover you for all eventualities, should something go wrong.
As a landlord, it is your responsibility to make sure your flats stay in a liveable condition. If you are unable to cover the cost of repairs you will likely also experience a loss of income.
What does it include?
What is included in your Block of Flats Insurance varies depending on what you need, but some of the covers you may want to include are:
- Property Owners’ Liability Cover
This covers you for legal costs and compensation payments should your building cause some harm, for example, if a roof tile came loose and hit someone walking by.
- Malicious Damage and Theft by Tenants Cover
This protects you against any damage or theft of your property caused by malicious tenants. In this situation, you have likely been through enough stress already, and you need to fix the damage done as soon as possible so you can fill your vacancy, which this insurance makes easy to do without putting you out of pocket.
- Loss of Rent Cover
Loss of Rent Insurance covers you if the worst should happen and your block is uninhabitable, or if a tenant is unable to pay, so you have guaranteed income no matter what circumstances may happen. If you don’t have this cover you may find your income fluctuates and is at risk.
- Buildings and Landlord’s Contents Cover
Buildings and Landlord’s Contents Insurance covers you for any damage to your building due to fire, flood, or other damage out of your control. (Though you should note that some insurers exclude damage caused by defective workmanship).
Landlord’s contents insurance is important as it covers the contents of any communal areas in the building, such as lobbies, communal lounges, gyms, and hallways. With this insurance, you don’t need to worry about a tenant breaking a piece of furniture or even someone getting into the lobby and stealing something.
- Alternative Accommodation Cover
This cover helps you provide your tenants with alternative accommodation in the event that they are forced to leave their homes for an accident you are insured for, such as a fire or flood. The costs covered in this vary from insurer to insurer, but generally, they’ll cover alternative accommodation costs up to 20-25% of the building’s sum insured.
- Other Cover
Some insurers are happy to include other forms of coverage in your insurance policy, such as employer’s liability insurance, extended legal expenses coverage, home emergency cover, terrorism cover, and engineering and inspection cover.
How to save money on your block of flats insurance?
- Get on the phone with a couple of companies and discuss your needs, but don’t get sold on the cover you don’t need.
- Add extra security to your property, such as CCTV cameras, security lighting, and access control, this often helps drive your premium down.
- Pay annually instead of monthly. This way you can avoid the extra fees the insurance company charges for monthly payments.
- Increase your excess.
- Use one company’s quote against another to try and push the price down.
It is important, however, to remember that the costs of something going wrong can be extremely costly, so it’s worth not cutting on the cover you genuinely need to save money.
How much will my cover cost?
This is a difficult question to answer because one property owner’s circumstances and needs vary so much from the next. The best thing to do is to get some quotes from the companies listed above so you can find out what they include and exclude, and how much they would charge for your property per year or monthly. A few factors that affect the cost of your premium are:
- Where the block is located
- Whether you offer your properties furnished or unfurnished
- What level of cover you want and need
- How you plan to pay for your cover (as with other forms of insurance, you will pay less if you pay annually instead of monthly)
- Security measures on the building
What policy is best?
This is, of course, down to your own individual needs and preferences. You need to make sure your policy includes your chosen needs and covers any particular concerns you may have.
Do I need this insurance if I don’t act as landlord?
In most circumstances, you need Block of Flats Insurance regardless of whether you act as landlord to your tenants or have the property managed by another party.
Does block of flats Insurance include building cover?
Yes, but you should read your policy documents carefully to check your policy covers everything you need it to.
Do I need separate block of flats Insurance policies for each property in my portfolio?
No, often, most insurers will help you manage all your buildings under one policy. In fact, most of them will provide you a discount for additional properties.