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If you own a house, insuring it is pretty simple. You need buildings insurance to cover the bricks and mortar, and contents insurance for your personal belongings. Things are different if you own a flat.
Do you need buildings cover?
You still need contents cover, but in many cases, you can skip buildings insurance. You'll need to check your personal situation carefully.
If you own a leasehold flat, the building should be insured by the landlord who owns the freehold.
Typically, it isn’t your responsibility to take out buildings cover (although you may still be paying the premiums, via your service charge). In recent years, however, growing number of leaseholders have clubbed together to buy a share of the freehold.
This gives you more control over the property, but it also means you have greater responsibilities, one of which is to arrange buildings cover.
Sometimes the different freeholders do this individually, but it may be cheaper and simpler to take out a block policy covering all of you.
One attraction of owning the freehold is that you have a greater incentive to shop around for low-cost buildings insurance, because this can save you money.
Insuring your possessions
Things are much clearer when insuring your personal possessions. Regardless of whether you own a leasehold or share a freehold, you must buy household contents cover if you want to protect your belongings against loss, theft, fire or accidental damage.
If you rent your flat, rather than own, the situation is slightly different. In this case, you shouldn’t have to worry about paying for buildings insurance at all, because this is the landlord’s responsibility.
But you do need contents cover to protect your own stuff. If you are in a flatshare, you have to decide whether you want to insure your own possessions individually, or take out a single contents policy covering everybody in the flat.
The first option is much more straightforward. If you set up a communal policy, you have to make sure everybody pays up on time. Things can also get complicated when one flatmate moves out, and another moves in. You could try getting premium quotes for both, to see which is better value. But most people just get their own cover.
Tenants living in a rented flatshare can sometimes face difficulty getting cover. You might trust your friends, but that doesn’t mean your insurer will.
Another concern is that an old tenant may still have the keys, while burglars are also known to target shared accommodation.
All of this adds to the insurance risks, and some insurers just don’t want to know. Others who do offer cover may only cover theft where there are signs been forced entry, so they won’t pay out if you have light-fingered flatmates.
Again, others will offer protection. By shopping around, you should still find a good choice of insurers who will give you the cover you need.
Another reason some insurers don’t like flats is that any damage may not be caused by people in the apartment they are insuring, but by a neighbour, say, a leak from the flat above.
If you only need contents cover, you still have to choose your policy carefully. Make sure you buy sufficient cover for all your possessions, because if you are underinsured, your insurer is within its rights to scale back any payment if you do claim.
You can also reduce your premiums by taking a larger excess on any claim. However you own your flat, and whatever type of insurance you need, you could save money by shopping around.