Blocks of Flats Insurance Guide

In short

• One policy insures the whole building — structure, communal areas, lifts and shared plant.
• The lease decides who must insure: freeholder, managing agent, RTM or RMC company.
• Rebuild sum insured (not market value) is the single most important figure on the policy.
• Since 2024, FCA multi-occupancy rules give leaseholders customer-style rights and commission disclosure.
• Blocks are a specialist risk — an FCA regulated specialist broker can reach schemes comparison sites cannot.

What blocks of flats insurance covers

A block policy is a commercial buildings contract written for multi-unit residential and mixed-use property. Instead of each flat being insured separately, one policy responds to damage anywhere in the building, and the cost is shared between leaseholders through the service charge.

• Buildings cover for the full rebuild cost, including foundations, roof, external walls and fitted interiors of each flat.
• Communal areas — hallways, stairwells, entrance doors, bin stores, car parks and boundary walls.
• Shared plant and services — lifts, communal boilers, door entry systems, security gates and CCTV.
• Property owners' liability, typically £2m to £10m, covering injury or damage claims from residents and visitors.
• Loss of rent and alternative accommodation if flats become uninhabitable after an insured event.
• Trace and access — the cost of finding and exposing a leak, which is a frequent block claim.
• Optional extras — terrorism, engineering inspection of lifts and boilers, legal expenses, and directors' and officers' liability for RTM and RMC boards.

Who is responsible for insuring the block?

The lease is the deciding document. Four common structures:

• Freeholder-managed — the freeholder or their managing agent insures and recharges leaseholders via the service charge.
• Right to Manage (RTM) company — leaseholders have taken over management and arrange the block policy themselves.
• Resident management company (RMC) — a company named in the lease, run by leaseholder directors, insures the building.
• Share of freehold — flat owners jointly own the freehold and jointly arrange one policy for the whole building.

How insurers price a block of flats

We do not quote premiums. Understanding the rating factors helps you prepare a stronger submission so more insurers are able to consider the risk.

• Rebuild sum insured — the cost of rebuilding from scratch including demolition, professional fees and VAT. Not market value.
• Number of flats and total floor area.
• Construction and age — standard brick and slate rates differently to timber frame, single skin, flat roofs or non-standard panels.
• Cladding and fire safety — cladding type, EWS1 form, compartmentation, alarms and any waking watch.
• Location — flood zone, subsidence-prone soils and crime rating.
• Occupancy mix — owner-occupied, let, students, short-term lets or commercial units at ground level.
• Claims history over three to five years, with escape of water the most common driver of increases.

FCA multi-occupancy rules (2024 onwards)

Following the leasehold buildings insurance market study, the FCA introduced rules that took effect on 31 December 2023 for insurers and 31 March 2024 for brokers, freeholders and managing agents acting as intermediaries.

• Leaseholders are treated as customers of the policy even though they are not the policyholder.
• Commission and remuneration earned by brokers, freeholders and managing agents must be disclosed.
• A summary of cover and pricing information is provided to leaseholders on request.
• The policy must deliver fair value and any remuneration must be justified.
• Insurance must not be placed with a party simply because it pays the highest commission.

Building Safety Act 2022 and higher-risk buildings

Buildings at least 18 metres tall or with seven or more storeys are classed as higher-risk and carry duty-holder registration and safety-case obligations. Buildings between 11 and 18 metres are relevant buildings and attract detailed cladding and compartmentation questions. Heights are measured to the finished floor level of the top occupied storey.

An EWS1 form is a one-off external wall system assessment, valid for the whole building for five years. Ratings A1 to A3 indicate no significant combustible materials or that any present are adequately controlled. B1 means combustible materials are present but no remedial work is required. B2 means remedial work is needed, which most often narrows the insurer panel until works complete.

Buildings undergoing cladding remediation are harder to place but are not uninsurable. Underwriters generally look for a dated remediation programme, funding confirmation, current interim measures, the latest fire risk assessment, and hot works and site security controls.

Why use a specialist broker rather than a comparison site

Blocks of flats are underwritten as commercial property risks. Mainstream comparison sites are built for single homes and cannot rate communal areas, multiple leaseholders or shared plant. A specialist broker holds agencies with insurers and delegated schemes designed for multi-unit buildings, and can present a non-standard risk in a way insurers are able to price.

Frequently asked questions

What is blocks of flats insurance?

Blocks of flats insurance is a specialist buildings policy covering an entire residential or mixed-use apartment building under one contract — the structure, roof, communal hallways, stairwells, lifts and shared plant — together with property owners' liability, loss of rent and alternative accommodation. It is arranged by whoever is responsible under the lease: usually the freeholder, managing agent, RTM or RMC company.

Who arranges insurance for a block of flats?

Responsibility sits with whoever the lease says must insure. In most long leases that is the freeholder or their managing agent; in buildings where leaseholders have exercised the Right to Manage or own a share of freehold, an RTM or RMC company arranges the policy and recovers the cost through the service charge.

How are block of flats premiums rated?

Insurers rate on the declared rebuild sum insured, number of units, construction type and age, roof type, location risks such as flood and subsidence, occupancy mix, fire safety and cladding status, and the claims history of the last three to five years. Escape of water is the single most common cause of claims in blocks.

Does the Building Safety Act 2022 affect insurance?

It affects the information insurers ask for. Buildings above 11 metres or five storeys have duty-holder and safety-case obligations, and insurers routinely ask about cladding type, EWS1 status, remediation plans and fire safety measures before quoting.

What are the FCA multi-occupancy rules?

Since 31 December 2023 for insurers and 31 March 2024 for brokers, freeholders and managing agents, leaseholders must be treated as customers of the buildings insurance policy. That means disclosure of commission, a summary of cover shared with leaseholders on request, and pricing that can be justified as fair value.

What is Landlord Quote's role?

Beyond Leads Ltd T/A Landlord Quote is an FCA authorised lead generation business. We do not give advice, arrange cover or quote premiums. If your enquiry matches, your details are shared with an FCA regulated broker who specialises in this sector and they contact you directly.