Freeholder Insurance Quote: How to Get the Right Price for the Right Cover

Freeholder Insurance Quote: How to Get the Right Price for the Right Cover

A freeholder insurance quote is more than a headline premium. It is the starting point for understanding what your insurer will and will not pay for, what the lease requires, and whether the cover on offer is genuinely fit for the building you own. This guide explains what information you need to provide, what to look for in the figures that come back, and how to make a sensible comparison between alternative quotes.

Information Your Insurer Will Ask For

To produce an accurate freeholder insurance quote, your insurer or broker will need a clear picture of the property and the people connected to it. Be ready with:

• The full address of the building, including postcode
• The number of flats and any commercial units
• The year of construction and the type of construction (brick, stone, timber frame, concrete)
• The roof construction (slate, tile, flat felt)
• Whether the building is listed, in a conservation area, or has any non-standard features
• The reinstatement sum insured, ideally from a recent RICS assessment
• Whether the flats are let, owner-occupied or share-of-freehold
• The claims history for the building over the last five years

Setting the Sum Insured

The single most important number on the quote is the sum insured for the buildings. This must reflect the full reinstatement value: the cost to demolish the existing structure and rebuild it to the same standard, including professional fees, VAT on those fees, debris removal and any costs of meeting current building regulations. Insurers will sometimes index-link the figure each year, but indexation is not a substitute for a proper RICS Reinstatement Cost Assessment every three to five years.

What the Premium Should Include

A well-constructed freeholder insurance quote should already include the following as standard. If it does not, ask why:

• Cover for the building including communal areas, fixtures, fittings, fixed installations and underground services
• Standard perils: fire, lightning, explosion, storm, flood, escape of water, theft, malicious damage, subsidence, heave and landslip
• Property owners' liability of at least £2 million, with £5 million or £10 million for larger blocks
• Employers' liability if any staff are employed, set at the statutory minimum of £5 million
• Loss of rent and alternative accommodation cover
• Trace and access cover for finding the source of escape of water
• Accidental damage to underground pipes, cables and drains

How to Compare Quotes Like for Like

It is easy to be drawn to the lowest premium without realising the cover differs in important ways. When comparing two or more freeholder insurance quotes, lay them out side by side and compare the following figures explicitly:

• Sum insured for the buildings
• Standard and voluntary excess for each peril (subsidence and escape of water often carry higher excesses)
• Indemnity period for loss of rent (12, 24 or 36 months)
• Limit of indemnity for property owners' liability
• Whether legal expenses cover is included or optional
• Specific exclusions, including any imposed because of claims history or building age

Factors That Move the Premium

Your final premium reflects a number of risk factors, only some of which you can influence:

• Location. Flood risk, subsidence risk and crime rate all feed into the postcode-based pricing model.
• Construction. Standard brick and tile buildings attract lower premiums than non-standard construction such as timber frame or steel cladding.
• Age and condition. Older buildings, listed buildings and any with known structural movement attract higher premiums.
• Claims history. A clean claims record over the last five years materially reduces the premium.
• Sum insured. The reinstatement value is the largest single driver of premium.
• Excess. Voluntarily raising the excess can lower the premium, provided leaseholders are willing to accept this through the service charge structure.

Once You Have Accepted a Quote

When you accept a quote, ensure you receive the full policy wording, schedule and statement of fact. Read the statement of fact carefully: it is the record of the information your insurer relied on, and any errors must be corrected before they cause a problem at claim time. Notify leaseholders that cover has been placed and provide a summary of cover on request, as required under section 30A of the Landlord and Tenant Act 1985.

For background on how cover is structured and what to look for in the policy itself, see our guide to freeholder insurance policies and our wider freeholder building insurance comparison.

Get a Fast Freeholder Insurance Quote

We provide quotes from specialist insurers who write freeholder buildings business every day. Get A FAST Quote today — give us a few details about the building and we will return a competitive freeholder insurance quote with the right cover for your obligations.