FREEHOLDER INSURANCE

If you own the freehold of a property, you own the building and the land on which it stands outright and for as long as you choose, and are free to sell it or bequeath the property in your will just as you see fit.

As the owner of the freehold property, therefore, you have the right to:

• occupy it yourself as your principal place of residence;
• use it as your second or holiday home;
• let it to tenants under a tenancy agreement of your choosing; or
• grant a lease to leasehold tenants – leasehold property is perhaps most commonly encountered as a form of tenure for flats.

Whatever the type of tenure, however, as the outright owner of the property, you are likely to be seeking freeholder insurance.

Why do you need freeholder insurance?

The property on which you own the freehold is likely to represent an investment of considerable value.

You want to protect it, therefore, against the wide range of risks and perils to which any property is exposed and rely upon an insurance policy to provide sufficient compensation for repairing any damage caused by those risks – in the most extreme case, enough to cover the cost of the complete rebuilding of your property.

Freeholder insurance therefore typically protects both the structure and fabric of the building and its contents against such risks as fire, flooding, storm damage, smoke damage, impacts, vandalism and theft.

What you need to know when buying cover

The property you own might be occupied by yourself or leased or let to tenants. Your freeholder insurance needs to reflect the use.

If you are the owner occupier, many standard forms of home insurance may be appropriate for safeguarding the structure and fabric of the building and the contents within it.

If you are granting a lease or letting your property to tenants, however, your freehold insurance needs to recognise this particular use – and the risks and perils that go with it. A property which is leased or let to others may face quite different risks and perils to those when it is occupied by its owner.

Conventionally, this is known as landlord’s insurance and, although any one policy may differ quite widely to another, typically it provides for:

• cover against loss or damage to the structure and fabric of the building;
• cover for any contents which continue to be owned by the freeholder;
• property owner’s or landlord’s liability insurance – to provide indemnity against claims from leaseholders, tenants, their visitors or member of the public who allege that some breach of your duty of care has resulted in their suffering an injury or having their property damaged in some way; and
• loss of rental income or ground rent, and the provision of alternative accommodation, if a major insured event leads to the property becoming temporarily uninhabitable.

Why choose us?

Freeholder insurance, therefore, may be somewhat more complicated and involved than arranging simple, standard home insurance.

At UKinsuranceNET we are practised in resolving any such intricacies and ensuring that you secure the insurance cover you need – as an owner occupier or landlord.