Leaseholder buildings insurance

Increases in buildings insurance premiums have led to higher costs for some leaseholders. Find out about your rights if you’ve been affected by these increased costs.

If you’re a leaseholder, you are likely to make payments to your property owner or property managing agent to cover the cost of buildings insurance.

This cost has increased significantly for some apartment buildings, especially if they are clad in unsafe material. 

Buildings insurance premiums 

When determining the premium for buildings insurance, insurers assess the risks involved in a property. Where these risks have increased (for example, where a review has discovered the exterior cladding to be potentially combustible), the premium may increase.

If your service charge increases due to higher costs for buildings insurance, you can ask the property managing agent for an explanation of the additional cost.

Some property managing agents are directly regulated by us, or act as appointed representatives of FCA-regulated firms, in relation to arranging buildings insurance (and any other regulated activities they provide).

If the agent is regulated by us, we expect them to deal with any requests for information reasonably and to provide adequate information.

You can check the Financial Services Register to find out if your property managing agent is regulated by us, or if they act as an appointed representative of an FCA-regulated firm.

Right to Manage

For many apartment buildings, the Right to Manage gives you the option to take over management of the building from the property owner.  

This involves more than just taking responsibility for arranging the buildings insurance. For example, you might become responsible for upkeep of communal areas and the structure of the building.  

It’s important to remember that taking over management won’t help to reduce insurance premiums if they are priced to accurately reflect the level of risk. 

Find out more about the Right to Manage from the Leasehold Advisory Service.

Making a complaint

If you're dealing with a firm we regulate, you may be eligible to complain to the Financial Ombudsman Service about the services of the firm.

You should complain to the firm in the first instance. If you’re unhappy with the response, you should refer the complaint to the ombudsman service. Find out more about how to complain.

If you can't complain to the ombudsman service, you might wish to take legal action. Complaints about property managing agents are heard by HM Courts and Tribunals Service in the First-tier Tribunal (Property Chamber – Residential Property).

If you are unhappy with charges levied by your property managing agent, the Leasehold Advisory Service has published a flowchart showing what your options are.