Block Insurance for Blocks of Flats
Every block of flats needs buildings insurance in the freeholder's or RMC's name, and the premium is recharged to leaseholders through the service charge. Get the sum insured wrong, or accept an undisclosed commission, and you create a liability the directors carry personally.
We arrange and review block policies, and we disclose any commission in writing before you buy.
Get a block insurance comparison
Send the address, number of flats, current premium and renewal date. We'll come back with a like-for-like comparison and the commission disclosed.
What block buildings insurance has to cover
A residential block policy is not a scaled-up version of a domestic buildings policy. The lease almost always dictates the minimum cover, and a policy that falls short of the lease is a breach the freeholder or RMC is answerable for.
- Full reinstatement of the building, including common parts, on a new-for-old basis
- Debris removal, professional fees, and compliance with local authority requirements after a loss
- Loss of rent or alternative accommodation, usually for 24 to 36 months
- Property owners' liability, typically £5m or £10m, covering common parts and grounds
- Directors' and officers' liability where an RMC or RTM company is the insured
- Engineering inspection for lifts and pressure systems where the block has them
- Terrorism cover where the lease requires it or the location makes it prudent
The reinstatement cost assessment nobody updates
The sum insured is the rebuild cost, not the market value, and it is the single most common defect we find on inherited blocks. Building-cost inflation over the last few years has been severe: a sum insured last assessed five or six years ago is very likely inadequate today.
If the building is underinsured, insurers can apply average — reducing a claim payment in proportion to the shortfall. A block insured for 70% of its true rebuild cost can see a £100,000 escape-of-water claim settled at £70,000, with the balance falling on the service charge.
The fix is a formal reinstatement cost assessment by a surveyor, refreshed roughly every three years and index-linked in between. It is a modest service-charge cost against an uncapped downside.
Commission — the issue leaseholders challenge most
Managing agents and freeholders are frequently paid commission by the insurer or broker on block policies. It is not automatically improper, but it must be disclosed, and leaseholders are entitled to ask what was paid.
Under the FCA's rules for multi-occupancy buildings insurance, leaseholders must be given information about the policy and the remuneration taken by the parties involved. Where a leaseholder challenges the premium at the First-tier Tribunal, undisclosed commission is one of the fastest ways for a managing agent to lose.
Our position is simple: the commission figure is stated in writing before you commit, every year, and you can instruct us on a fee-only basis instead if you prefer.
What drives your premium
| Factor | Effect on premium |
|---|---|
| Escape-of-water claims history | The biggest single driver; two or more claims in three years materially hardens terms |
| Construction and cladding | Non-standard construction, timber frame, or unresolved cladding issues can multiply the premium |
| Flat roof age and condition | An unmaintained flat roof invites exclusions or an increased excess |
| Flood and subsidence zone | Postcode-driven; may require a specialist market |
| Occupancy mix | Commercial ground floor, short lets or high tenant turnover all increase risk |
| Fire safety information | A current fire risk assessment and completed actions consistently improve terms |
| Sum insured accuracy | An up-to-date assessment avoids both underinsurance and paying for cover you don't need |
How we handle it
- Review the lease insurance clause so the policy actually matches the obligation
- Commission or refresh the reinstatement cost assessment and index-link it
- Market the risk across insurers and brokers rather than rolling over the incumbent
- Present a like-for-like comparison: cover, excesses, exclusions, and total cost
- Disclose all commission in writing, every renewal
- Run claims end to end, including loss adjuster liaison and contractor appointment
- Issue the summary of insurance cover leaseholders are entitled to on request
Frequently asked questions
Who is responsible for insuring a block of flats?
The lease decides. In most blocks the freeholder insures the whole building and recharges the premium through the service charge; where an RMC or RTM company holds the management function, it usually insures instead. Individual leaseholders insure only their contents and any improvements.
Can leaseholders challenge the block insurance premium?
Yes. Insurance is a service charge cost and must be reasonably incurred. Leaseholders can request a summary of the cover and inspect the policy, and can apply to the First-tier Tribunal to challenge the reasonableness of the premium — including any commission built into it.
How much does block insurance cost?
It is driven by rebuild cost, claims history, construction and location rather than a fixed rate, so the only meaningful answer comes from marketing the specific risk. What we can say is that blocks rolled over with the same insurer for several years are the ones where a re-marketing exercise most often produces a saving.
What is a reinstatement cost assessment?
A surveyor's assessment of what it would cost to rebuild the block from scratch today, including demolition, debris removal, professional fees and compliance with current building regulations. It should be reviewed roughly every three years and index-linked in the intervening years.
Do you take commission on block insurance?
Where commission is paid we disclose the amount in writing before you commit, at every renewal. You can also instruct us on a fee-only basis with commission rebated to the service charge.