Buildings insurance for share of freehold

[Hitmanandher]

We’ve been in our flat for years and always paid separate building insurance from flat upstairs. We both have share of freehold and new owners want joint building insurance. What are the pros and cons of joint insurance? Do we have to create management company?

I also have share of freehold with two other flats, we just insure the building then split the cost. No management company needed.

Many mortgage companies need the buildings to be insured as a whole for them to agree to lend.

Hope that helps

You won't need to create a management company at all. It is poor practice to both be insuring your own flats though as most mortgage companies advise the building has to be insured as a whole or else it gets really messy if the building were to burn down. For example what if they upstairs insurers refuses to pay out for some reason (under insured for example) but the downstairs insurer refuses to pay for a roof as a ground floor flat wouldn't normally have a roof. You get the picture.

One freeholder needs to organise the insurance, and then you just split the cost between you. Its that simple.