Building insurance for converted flats

[gettingprepped]

Hi everyone, hope I’m in the right place but let me know if not!

I own a flat, bought before I got married, which I rent out. There are 3 other flats in the building, and al 4 are leasehold. There’s no official residents/management association but the four owners work together to get stuff done, and each pay into a common pot monthly.

I have two questions:

1. Do we need collective buildings insurance, or can we do it individually? Quotes through commercial brokers are £2000+ but the insurance on my house is only £200 - yes the building with the flats in is twice the size, but this seems mad!
2. Do we need electrical certificates for the flats that are owner occupied? I understand it’s a condition of renting, but insurance seems to want to know the whole building has been inspected.

Thank you very much for any thoughts!

We are all freehold and we join with others for the whole building. If leasehold, what is the freeholder insuring? Do you have info? It’s their building.

Thanks @TizerorFizz I appreciate your response. Can I ask what your building is like and how much it costs? We’re getting quoted £2000+ for four 1-bed flats! If it’s better, who do you insure with/have as broker? Thanks!

Freeholder is useless, says ground rent is so low (£100 pa) we should sort everything all out ourselves. We need to challenge (really, buy freehold) at some point but I anticipate a battle and it’s not the most urgent problem unfortunately!

Flats should be insured together and it's usually the responsibility of the freeholder to organise under the terms of the lease (but the leaseholders to pay for it). Unfortunately it is often more expensive to do as a block than a house; the risk profile is larger post-Grenfell and there are only about four major insurance companies who offer flat policies.

You don't need EICRs for the individual flats as a general rule, unless the insurers assess it as an open risk.

Thanks @LBOCS2 that’s interesting. Don’t think our lease mentions insurance, but I’ll look again. Good to know about electrical inspections too - think the broker is being a bit blunt with their interpretation of the insurer’s question.

@gettingprepped Academy Insurance. It’s a 3x2 bed and 1x1 bed Victorian conversion. One flat is let out but the building has two front doors, each on a different street. So 2x2 beds are lower ground and ground floor, ours is 2 bed and 1st floor and the 1 bed flat is on the top floor. Our rebuild cost is £700,000 (2022) . We paid just under £1500 between the 4 flats. However rebuild cost is definitely too low. Should be nearer £1m so that will put premium up.

That’s so helpful @TizerorFizz thank you. Your set up isn’t all that different from ours, sounds like your building is a bit bigger, so it’s good to know our insurance premium isn’t miles off what you’ve paid then. One of our flats is currently unoccupied which is making it worse I think. Our premium was £500-something last year though, so the increase was a shock and I still don’t really know why it’s gone up so much.

Can I ask please - if you have the patience! - about electrical inspections? Do you have them done for all the flats/whole building or just tenanted ones? And how you know rebuild cost - who estimates that? Thank you!

We have one set of tenants but I’m not aware we do electric checks for the whole building. It has two communal areas as there are two front doors but the building was refurbished in 2011 so is up to date.