Contents insurance for flats

Leasehold properties tend to include buildings insurance (or Property Owners insurance) in the shared Service Charge or Insurance Rent, but not Contents Insurance or Landlord's Insurance. In this article we'll look into the typical setup for various insurance policies.

Buildings insurance cover

Apartment buildings in England and Wales generally include buildings insurance within a shared Service Charge fund or Insurance Rent. This spreads the cost across all owners in the building, and leaves the administration to a single entity, normally the manager or the freeholder.

This is to ensure that all properties in the same building are covered by insurance and avoid the risk of individual flats failing to organise insurance. It also allows for improved efficiency when a single company organises and places the policy, and often that company will have more experience with handling insurance than the majority of individual leaseholders.

However it would be a huge challenge to include tailored or individual policies, such as Contents or Landlord's, and so anything within the flat remains the responsibility of the individual leaseholder.

Landlord's Insurance

For leaseholders that rent their flats to tenants, it can be beneficial to arrange Landlord's Insurance. These policies usually cover any damage within the flat which might be caused by the tenant. It can also include loss of rent, for example if the tenant loses their job or is unable to pay their rent. Some policies also include liability cover for the landlord, in case of injury to the tenant while occupying the property.

It is of course impractical for a freeholder to organise Landlord's Insurance policies for individual flats, tailored to specific rents, tenants and circumstances, and so any such policy would need to be organised by the individual leaseholder.

Contents Insurance

Cover for Contents provides insurance against any damage to contents and belongings within the flat (which can be both owner occupiers or landlords and tenants). This includes any items which are not fixed within the flat, for example beds, wardrobes, shelves, books, and electronic devices.

Contents is also normally the policy that covers carpets and white goods, such as washing machines and fridge / freezers. The reasoning is normally that these items are removable, and as such do not form part of the flat itself. As always, it is important to check the specific wording of your policy to be sure. One of the finer points is that fitted white goods (like integrated dishwashers or washing machines) are considered part of the building due to the difficulty removing them, whereas free-standing white goods are deemed contents.

It is very important for residents, whether owners or tenants, to consider Contents Insurance. Personal belongings are typically not covered by a buildings insurance policy, and so without Contents Insurance any damage to valuable or expensive possessions would not be reimbursed. Managers cannot add this cover to a buildings insurance policy, so residents must take responsibility to organise sufficient cover for whatever belongings may be in the flat.

Common perils

The most likely risks relating to Contents Insurance are often leaks, whether plumbing issues or roof leaks. These can often occur spontaneously and without any prior warning, so it is vital that residents prepare beforehand and organise adequate cover. This can also mean periodic review to ensure that any new purchases, particularly expensive items such as large furniture, jewellery, watches or antiques, have sufficient cover.

Less obvious but more serious risks can include flood (from storms or rivers) or fire (within your flat or starting from other properties). While far less frequent, they can lead to much more extensive damage and total, rather than partial, losses. When organising Contents Insurance, you should confirm what types of risks and damage are covered, and if any specific causes are excluded from the policy.

Remember to check for cover

Insurance is an important service to have in place when required, but often disregarded day-to-day until it is needed. Always be sure to check proactively that you have suitable cover for any eventualities that you can't afford to pay yourself, otherwise you not realise until it is too late. You should also be aware that the lease for the property normally sets out what insurance the freeholder or manager is required to arrange, and it can include either more or less than you expect. If in doubt, you can enquire with your manager or freeholder to confirm what details are included in the buildings insurance policy.