Contingent Buildings Insurance

[Buyingahouse2024]

Hi all,

Bit stuck! We're currently in the process of buying a house and my partner is selling his maisonette. For context the property is a shared freehold but a lease is in place just to cover who is responsible for what (lease hold has well over 900 years on it). My partner's always had buildings insurance for his property. The buyers solicitors are asking if we have Contingent Buildings Insurance and are asking us to purchase this. To me this makes no sense when we're moving why would we buy an insurance policy when there's buildings insurance in place?

Has anyone come across this before and if so what options do we have?

Yes I have heard of this insurance before. However, I have owned a leasehold flat with a shared freeholder arrangement (all flats had an equal share in the freehold, there was no separate freeholder or management company) and we all had 'normal' buildings and contents insurance. Contingent insurance was never mentioned by my solicitor....

Contingent buildings insurance is a type of insurance designed to provide protection in the event that the freeholder or landlord fails to insure the building, or if their insurance policy is inadequate or does not provide sufficient coverage.

In many cases, the freeholder or landlord will be responsible for insuring the building, and this insurance will typically cover the entire building, including all individual units or apartments within the building. However, there are situations where the freeholder or landlord may fail to insure the building or may have inadequate insurance coverage, leaving leaseholders responsible for insuring their own property.

Contingent buildings insurance is designed to provide protection in these situations, by providing coverage for the structure of the building, as well as any fixtures and fittings within the individual units. This can include things such as the walls, floors, and ceilings, as well as any built-in appliances or fittings such as kitchen cabinets or bathroom fixtures.

So in short, contingent insurance does seem to cover the same things as other buildings and contents insurance for other types of properties but is specific to the leasehold / freeholder nature of the type of building you are intending to buy.

@Pr1mr0se thank you so much for this. This is really helpful. So my partner currently has the same set up as what you had. I wonder if we ask the owners upstairs for the buildings and contents insurance if that would be sufficient. Thanks again

Great answer from @Pr1mr0se.

The main advantage of buying this insurance is that, in the example you give, even if you've checked the other insurance, that is only valid at a point in time. The policyholder could cancel, amend or forget to renew their policy. Unless you are an expert in reading policy wordings there could also be exclusions or clauses that prevent a claim being successful, or a lower/inadequate limit or sum insured.

Anything insurance wise labelled "contingent" is a safety net.

Thank you! Due the responses I've had we've pushed back to our solicitors and told them we are not buying contingent insurance. We're moving, we've got buildings insurance as does the other freeholder upstairs, the new buyer can purchase this insurance if she really wants to