In July, a tenement building on the southside of Glasgow, on the corner of Kenmure Street and Albert Drive, collapsed. The building had been badly damaged by fire in 2020, so was already lying derelict and fenced off from the street before the incident. Thankfully, nobody was injured, but people living in the neighbouring flats had to be evacuated from their homes in the early hours of the morning. The images of the missing roof, broken windows and collapsed façade have prompted Under One Roof to urge all tenement owners to take action with their buildings insurance, and to confirm that you are insured against major damage to your tenement property.
What is buildings insurance?
Buildings insurance is a type of insurance which protects both your flat and the common areas of your building from the costs of severe damage to your own and adjacent buildings. Under the Tenements (Scotland) Act 2004, tenement owners are legally obliged to have insurance which covers both their own flat and their share of the common areas of their building. Mortgage lenders also typically make it a requirement for mortgage contracts. Even though these requirements ensure that most tenement owners do have buildings insurance, you may want to check that you and your neighbours have the appropriate level of coverage.
Why does buildings insurance matter?
Buildings insurance is crucial for protecting yourself against the cost of major damage, caused by events such as fire, flooding, subsidence and collapse. These events sometimes require a tenement to be completely rebuilt, and since it is impossible to rebuild only the insured flats, owners who do not have insurance can face catastrophic costs and can even lose their home. It can also affect their neighbours, who can be left in temporary accommodation for months or years, waiting for the funds to become available to rebuild their property.
If you let a tenement flat out and do not have buildings insurance, you could face legal action for failing to carry out a legal obligation. Similarly, your co-owners can take legal action against you, and you can be ordered by a Sheriff to take out adequate insurance.
What kind of insurance do I need?
If you live in a tenement flat, you can pick one of two types of insurance; individual or block. You may decide to get together with your neighbours and take out one block policy together, which will cover the whole building. The rules for how this is arranged may be in your titles, or are covered in the Tenements (Scotland) Act 2004.
Block insurance can help tenement owners to save money, because in the event of serious damage to your building, you can make just one claim and pay only one excess. Block insurance can also be customised to suit any unique aspects of your building, such as areas which are unexpectedly held in common.
If you choose individual buildings insurance, this can be arranged directly with insurance companies. It is not often listed on price comparison websites.
Whether you choose block or individual insurance, you must ensure that it provides sufficient coverage for every part of your building, for every kind of damage. Aside from collapses, check that your insurance covers you for escape of water, storms, floods, subsidence, fires, and your own liability as the property’s owner. You may also find it helpful to include cover for legal expenses, which is sometimes called Family Legal Protection. If you need to pursue a legal dispute relating to damage to your home, this can cover the cost.
Additionally, as in the case of the neighbours of the collapsed building in Glasgow, you may face the cost of finding temporary accommodation. Check that your policy covers this kind of scenario, in the event that you are no longer able to live in your own building.
For peace of mind, we would encourage you to speak to your neighbours about insurance, to make sure that everyone in the building has suitable cover for the damages listed above and that this is renewed every year. You can ask to see proof of your neighbours’ insurance and if they are unable to provide you with proof, you can as a last resort seek legal action to order them to take out insurance.
How do I know I have adequate cover?
To make sure that you have the right kind of cover for your building, we recommend organising a Building Reinstatement Valuation every three to five years. This is a type of survey which assesses the cost of rebuilding your property, and is carried out by a RICS-qualified surveyor. It takes into account factors such as the increasing cost of materials over time, to give you an accurate picture of what your insurance should cover.
Always check that your insurance premium is based on the cost of rebuilding, not on the value of your property at purchase. This is because, especially in the case of traditional stone tenements such as the one in Glasgow, the cost of rebuilding may be much higher than the purchase cost.
If you are under-insured, your claim will be averaged, meaning that you will only get a fraction of the insurance claim. You will need to make any payments above the amount you receive out of pocket, and this could be extremely expensive.
Find out more about buildings insurance on Under One Roof’s website. Under One Roof is Scotland’s only charity providing free, impartial information to Scotland’s half a million tenement flat owners and housing professionals. We specialise in giving information and support on issues relating to tenement maintenance, management and retrofit.
