For flat owners in Scotland, the importance of adequate building insurance cannot be overstated. Devastating and unexpected events like fires or floods do happen. Having the right building insurance cover is essential to safeguard your property against potential damage.
This article covers the basics of building insurance for flat owners, including legal responsibilities, how to ensure you have the correct level of cover, and what steps to take if an insurance policy hasn’t been reviewed in recent years.
Why is it important to have adequate building insurance?
Having building insurance is a legal obligation for every flat owner under the Tenements (Scotland) Act 2004. Building insurance must cover the tenement and the common parts, not just an owner’s individual flat, to ensure coverage for major and expensive damage to the building should the worst happen.
Whether it’s fire damage that requires a full rebuild or flooding that causes severe structural repairs, these events can lead to undoubtedly high repair costs. Without building insurance, owners could face significant financial burdens for such repairs.
Additionally, it’s crucial for all owners in the building to have adequate building insurance. Since it’s not possible to rebuild just one part of a tenement block, the lack of proper cover for even one owner can delay or derail the entire repair process for everyone involved.
What type of insurance do I need?
There are two options for flat owners when it comes to insurance: a block policy or an individual policy. The first step to take when deciding which to go for is to check your titles. Your titles will tell you whether a block policy is required or if an individual policy is sufficient.
A block policy covers the entire tenement and its common areas, ensuring all owners are protected under a single plan. It’s often more convenient because it ensures that everyone is covered for common repairs, and any claims can be handled together rather than individually. However, these policies can carry higher premiums due to the increased risk of multi-flat claims.
If a block policy isn’t required by your titles, you may still want to consider one for the sake of simplicity and shared responsibility. If you opt for an individual policy, it’s crucial to ensure that it covers the common parts of the building and that your co-owners also have an adequate policy in place.
Asking co-owners for proof of insurance
If you do not have a block policy and suspect an owner does not have building insurance or has insufficient cover, you can issue a formal request for proof of insurance. Under the Tenements (Scotland) Act 2004, you have the right to request proof of insurance from your fellow owners. This ensures that everyone is fulfilling their legal obligations and carrying adequate cover. If they fail to provide this within 14 days, you can take legal action through the Sheriff Court to compel them to take out the necessary insurance.
This legal protection is crucial because a single uninsured owner can lead to major issues for the rest of the building in the event of significant damage. Understanding the legal position ensures that owners who don’t meet their obligations can be held accountable and your property stays protected.
Ensuring you have the right level of cover
It’s also important to make sure that you have the right level of cover. Again, check your titles to see if they say anything specific about your common insurance obligations. However, it is recommended to have insurance which is sufficient to cover the cost of rebuilding your flat, your interest in the common parts, professional costs, and a small buffer.
A tenement building should be insured up to its reinstatement value. This is how much it would cost to completely rebuild the building scratch. For an estimate of rebuilding costs, you can use the Building Cost Information Service. This service provides a basic overview; however, it does not account for properties constructed before 1946 or any listed buildings. But if the reinstatement value it provides is significantly different from your current insurance coverage, it should prompt you to act.
Reinstatement valuation surveys
To accurately determine the costs of fully rebuilding your property, it’s advisable to obtain a Building Reinstatement Valuation. These valuations should be conducted by a RICS-qualified surveyor.
It is recommended to have one carried out every three to five years, as the costs of building materials and required expertise can fluctuate over time. If you have not had a Building Reinstatement Valuation carried out for over five years, it is well worth getting this organised. The cost of these surveys can vary depending on the number of owners and the size of your building – it could cost around £50 per owner.
Building insurance is an essential safeguard for your building. Ensuring that you have the right cover, at the correct level, is vital for protecting both your property and your finances. Start by checking your titles, asking for proof of insurance from your fellow owners, and organising a Building Reinstatement Valuation if it’s overdue. A little time and effort now could save you from significant costs and stress in the future. To learn more about building insurance, check out this article.
