Who is responsible for insuring the building?
The leaseholder is responsible for insuring their leasehold property (defined as the “demised” premises in your lease). This includes the fixtures and fittings inside the property, for instance, fitted kitchen units.
Lewisham Council, as the freeholder, is responsible for insuring the common parts of the building (defined as the “reserved” premises in your lease). This includes the roof, foundations, and communal areas of the building.
Why do I need buildings insurance?
Your property is a valuable possession. If it is damaged, for instance by a fire, you would have to pay all the cost of the repairs to the demised premises if you did not have insurance, this could amount to many thousands of pounds.
If damage is caused in another part of the building, for example from a leaking water pipe in your property, you may face a claim against you from the resident of the other property.
Without insurance, you would have to meet this cost yourself. When you signed your lease you gave an undertaking (a covenant) to keep your property insured.
If you do not do this you have broken the terms of your lease. The Council, as freeholder, gives a similar undertaking for the common parts of the building.
Are all repairs covered by building insurance?
No, only damage caused by certain events is covered by your buildings insurance. It does not cover repairs needed due to general wear and tear.
Broadly speaking, and depending upon the exact wording of your policy, if damage is caused inside your property by fire, storm, flood, subsidence, heave, landslip, impact, explosion, storm, aircraft, earthquake etc, the cost of putting this right will be covered by your own buildings insurance.
If damage to the common parts of the building is caused by standard insured perils, the cost of repairing them will be covered by the insurance arrangements provided by the Council.
Can I choose the company I want to insure my property?
Yes. The lease says that you can insure with any “reputable” insurer. We do recommend that you obtain quotes from several different companies to compare the prices.
You may also want to consider insuring the contents of your home with the same company as there will usually be a discount when you buy more than one type of policy from them.
The Council chooses and arranges the insurance for the common parts of the building, you pay towards the cost of this insurance in your service charge.
Can I use the same insurance company as the Council?
Not at present as the current insurer specialises in large block policies rather than small individual ones.
Useful documents
Insurance cover 2021/22
Insurance – Property programme
Insurance – General terms conditions