Blocks of Flats Insurance - Blocks of Flats for insurance purposes fall in to 2 separate groups.

• Conversions - These are buildings that have been converted in to flats such as a large terraced house or perhaps an old factory premises.

• Purpose Built - These are buildings that were designed as and purpose built as blocks of flats

Blocks of flats insurance for this type of building often causes a great deal of confusion and many people try to insure flats on a individual basis when in fact the correct format is to insure the building as a whole.  Problems arise as unlike individual properties that are usually sold on a freehold basis, most flats are sold on a lease hold basis. This basically means that when you purchase a flat, you are only actually purchasing the right to occupy your particular space in the building for a set period of time. Typical leases are 99 years, 125 years or 999 years. The Free holder of the building actually owns the structure and at the end of the lease period, the right to occupy a flat will return to him or her. If you take a building that is split in to 8 self contained flats, there will be 8 individual leaseholders each owing the right to occupy their flat for a set period of time and the actual freeholder who owns the bricks & mortar and the land that the building stands on. In the terms of the lease , it is usually stated that the freeholder arranges the insurance and charges a proportion to each of the leaseholders, if all the flats are the same size, then each flat should in theory should pay the same insurance premium. The freeholder will also charge a ground rent to each flat ( usually a few hundred pounds a year and will make other service charges, these may be for building maintenance or perhaps the up keep of the gardens or grounds etc.

However, although the freeholder arranging the insurance is most common, this does not stop individuals or there solicitors trying to arrange insurance on an individual basis at the time of purchase.
Checks should be made because usually insurance is in place and it is far simpler if one block policy is issued for the whole building, image a scenario where a serious fire effects a block of ten flats and each one has a separate insurance policy, what a nightmare it would be to try to obtain a claim settlement. Far better that there is one policy covering the whole block and only one insurance company to deal with.

Another factor to take in to consideration when purchasing a flat is that it is in your interest to make sure there is a common block policy for all of the flats, imagine a situation where several of the flats were uninsured and there was a serious claim. The owners may not be able to afford to reinstate their property and if left in an un repaired state this may have a effect on the resale value and your own ability to sell your own flat

When applying for a block of Flats insurance policy is is easier if you elect a spokesperson for the building who can conduct all enquires for quotations, it is also vitally important that a register is kept of all submitted claims as if you are considering changing insurance companies at any time, they will want to know all claims that were made under a policy usually occurring within the previous 5 years. When you have settled on the premium, make sure that the insurance company notes every flat owners interest also each individuals mortgage lender will require their interest to be noted on the policy document to satisfy the conditions of the contract rights act.

The actual policy wording that you will receive will be very similar to a standard building insurance in that it will have to have a full range of perils necessary to satisfy the council of mortgage lenders requirements. You may find that the policy includes an amount for communal contents to cover hall ways etc but it must be stressed that this section of the policy will only cover communal contents, it will not cover individual contents that just happen to be left outside etc. Some polices are also extended to include employers liability cover which is necessary if your block has a cleaner or a gardener.

As well as the standard building insurance policy that is available for blocks of flats insurance, there are some additional cover that can be added on as well. Not all insurance companies offer these covers but a broker should be able to arrange quotations for you.

• Legal Expenses Insurance

• Engineering Insurance

• Directors & Officers Liability Insurance.