Insurance disclosure rules for residential leaseholders

From the start of 2024, residential leaseholders who pay a service charge that includes buildings insurance will receive information about their insurance cover.

What will be provided?

  • A summary of the insurance policy, including benefits, cover, exclusions, duration, and sums insured.
  • The price of the buildings element of the insurance policy, including the split for the leaseholder’s building if the policy covers multiple properties.
  • The commission paid to any intermediaries and the link between the intermediary and the insurer.
  • An explanation of why the policy recommended is in the interests of both the freeholder and the leaseholder.

When will it be provided and who to?

Freeholders will be provided with the information within 30 days of their insurance policy renewal that takes place on or after 31st December 2023. Freeholders will then be asked to pass the information on to their leaseholders.

New business customers that join on 31st December 2023 or beyond will be sent the information within 30 days of the policy starting.

What is the process?

Residential leaseholders should have the information passed on to them by the freeholder. If this does not happen, we recommend leaseholders ask their freeholder or managing agent for the information in the first instance.

If their freeholder or managing agent is withholding the information or does not pass it on, then leaseholders will also be able to contact insurance companies directly.

Who do the new rules apply to?

Any residential leaseholders who pay a service charge to a freeholder or a managing agent that includes buildings insurance within it.

The rules do not apply to commercial leaseholders e.g. a shop or business leasing a property.

What is NFU Mutual doing?

NFU Mutual will provide freeholders with information about their buildings insurance after their insurance policy starts or renews.

We are committed to delivering the insurance cover customers need, at the right price and with a first-class personal service, and welcome the opportunity to provide this information.

As a mutual, we ensure all our products provide fair value to customers. Our customers are our members and we act in their long-term interests rather than focusing on short-term profits.

We recommend leaseholders speak to their freeholder or managing agent first, but if they do not disclose the information, they can contact us.

Key definitions

Freeholder - Owns the land on which the building stands.
Leaseholder - The person who has bought a lease which gives them the right to occupy the property for a fixed number of years. Can also be called the ‘lessee’.
Service charge - Money collected by freeholders from leaseholders to maintain the structure of the building, common areas and pay for any services provided. This can include a contribution towards the cost of the insurance for the building.
Managing Agent - A company appointed by the freeholder to run and manage the building and any services. May be involved in the sale or renewal of the policy, working on behalf of the freeholder.