Why it matters
What Buildings Insurance means for a landlord
Buildings insurance is almost always a mortgage condition, and rebuilding costs, not market value, set the sum insured, so under-insuring risks a shortfall on a total-loss claim. Landlords of leasehold flats need to check the freeholder’s block policy actually covers their flat adequately, because they are paying for it through the service charge. It should be arranged on a landlord/let basis, as tenant occupation changes the risk a standard owner-occupier policy assumes.
Worked example
How it plays out
Tom owns a house in Kent that would cost £280,000 to rebuild, although its market value is £350,000. He insures it for the rebuild cost, not the market value. His leasehold flat in the same town is covered by the freeholder’s block policy, so he asks for a copy each year to check the cover.
Common mistakes
Where landlords go wrong
- 01Insuring for market value instead of rebuild cost.
- 02Assuming a freeholder’s block policy covers everything without reading it.
- 03Not updating the sum insured after works.
What to do
A short checklist
- Get a rebuild cost estimate.
- Ask for the block policy each year for leasehold flats.
- Review cover after major works.
Sources
Checked against these sources on 16 September 2026. A guide to the rules in England, not legal advice: for a dispute or a possession claim, speak to a solicitor.
