How Block Insurance Is Paid For Through Service Charges
The building is insured under one policy, but the cost is shared. Here is how the premium reaches the service charge and what leaseholders can ask to see.
Block of Flats · 9 September 2026 · 7 min read
One policy covers the block. One party pays the insurer. Everybody in the building contributes. The mechanism that joins those three facts together is the service charge.
The Basic Mechanism
1. The lease places the insuring obligation on the freeholder, RMC or RTM company
2. That party arranges cover for the whole building and pays the premium
3. The lease sets out each leaseholder's proportion — often by flat, by floor area, or by a fixed percentage
4. The premium is included in the service charge budget and demanded from leaseholders
5. Evidence of the cover is made available to leaseholders
Our guide on service charge and buildings insurance walks through the same ground in more detail.
What Leaseholders Can Usually Ask For
Leaseholders generally have the right to request a summary of the insurance cover, and to inspect the policy and supporting documents. The summary typically shows:
- The name of the insurer
- The sum insured for the building
- The perils covered
- The significant excesses
- The period of cover
Most well-run buildings simply circulate the schedule at each renewal, which heads off most questions before they arise.
Why the Premium Can Move Between Years
Leaseholders often ask why the insurance line in the budget changed. Factors that commonly affect it include:
- A revised reinstatement cost assessment, or index linking applied to the sum insured
- Claims made on the building in recent years, particularly escape of water
- Changes in occupancy — more flats let, more vacancies, or short-term letting
- Fire safety and external wall system information becoming available
- Wider market conditions in the property owners' insurance sector
The parties arranging cover cannot control most of those. What they can do is make sure the information given to insurers is accurate and complete.
Commission and Transparency
Where a broker or managing agent is involved, remuneration arrangements are a recognised area of leaseholder interest, and there are regulatory requirements on brokers about disclosure to leaseholders. Questions on that should be put to the broker or agent handling the policy, who is the regulated party.
Landlord Quote does not arrange cover and does not receive insurance commission from leaseholders. We are a lead generation business, paid for introducing enquiries to brokers.
Common Disputes and Where They Go
- Reasonableness of the cost — dealt with through the statutory service charge framework, typically the First-tier Tribunal in England
- Failure to insure — a breach of the lease obligation
- Failure to supply a summary — leaseholders have statutory information rights
- Under-insurance discovered at claim stage — usually a question for the surveyor and insurer
Making an Enquiry
If you are responsible for arranging cover for a block, you can start an enquiry on the block of flats insurance page. Where your enquiry matches, we pass your details to an FCA regulated broker specialising in blocks, who contacts you directly.
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 is matched, your details are shared with an FCA regulated broker who specialises in this sector.
Beyond Leads Ltd T/A Landlord Quote (FCA FRN 940006) is an FCA authorised lead generation business. We do not provide insurance advice, recommend policies, arrange cover or quote premiums. This page is general information only. If your enquiry is matched, your details are shared with an FCA authorised specialist broker who will discuss cover and pricing with you directly.