Updated: 29 February 2024

What Does Leasehold Mean?

A leasehold is an asset, such as an apartment, that is owned by one party but held by another through a lease.

Leasehold insurance exists to protect policyholders in the event that their leasehold is cancelled.

Insuranceopedia Explains Leasehold

A leasehold could be cancelled if, for example, an apartment or commercial building burns down. In such a circumstance, an entirely new building would have to be constructed and rent prices in the new building could be much higher. The previously agreed-upon rent amounts in the lease would be voided and a new one would have to be drafted for the buildings and its occupants.

Leasehold insurance would provide coverage for losses resulting from such an incident.

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