Buildings Insurance

Homeowners – Buildings Insurance

In most instances the lease agreements states that South Lakes Housing are obliged to insure the buildings that leaseholders and shared owners live in and you pay us for providing this cover. The insurance clause within leases obliges South Lakes Housing to insure and keep insured the building against usual risks with an insurance office of repute, and to have the interest of the tenant and their mortgagee noted on the policy.

The insurance is arranged via a block policy covering all leaseholders, rather than a separate policy for each individual block of flats. This is standard practice for buildings insurance in England.

Leaseholders are provided with the following documents on an annual basis;

• An annual service charge letter which sets out the cost and requirement to pay for buildings insurance
• A document entitled ‘buildings insurance information – key information for leaseholders’ which contains a summary and details of the insurance policy, premium information, services provided by the broker and remuneration information, and any conflicts of interest
• A document called ‘residential buildings insurance cover summary –  which summarises the policy and the cover that is provided in respect of loss or damage caused to the building, reporting a claim, and details of the complaints procedure

It is your responsibility to contact the Insurer if you wish to make a claim.

South Lakes Housing do not insure the contents of your home. Leaseholders are advised to take out their own home contents insurance policies as contents are not covered within the buildings insurance policy which South Lakes Housing arranges, through a renowned insurance broker.

Why might the cost of my building insurance gone up in my service charge statement?

The cost of buildings insurance increased nationwide in 2020. This increase was due to a number of factors including:

• The impact of the coronavirus
• A reduction in insurer capacity, which means it’s been harder and more expensive to find insurance – the Regulator of Social Housing have acknowledged in their 2024 Sector Risk Profile report that “there is a limited range of insurers in the sector and some landlords have reported difficulties in obtaining multiple or even any quotes”
• Increased risks associated with things like building safety, flooding and climate change risks
• Rising inflation which has impacted on increased rebuild valuations, which is used to calculate the value of the buildings and its reinstatement costs
• Unsustainable loss ratios – property insurance premiums have been artificially low for many years. As a result, insurers’ combined operating ratios often exceed 100%, meaning the cost of providing property cover has been higher for insurers than the premium received.
• Rising reinsurance costs