Whether you joined the ranks of buy to let landlords with the specific aim of making a more or less full-time business of it, or whether you found yourself with a suitable property on your hands and became an “accidental” landlord, you are almost certain to have considered the importance of landlords insurance.
Without this cover, the property and its contents remain at considerable risk of loss or damage, the income stream on which you have come to rely might suddenly become disrupted, or you might face financially crippling claims for damages if someone else is injured or has their own property damaged.
In other words, you might consider landlords insurance – or buy to let insurance, as it is also known – an essential form of protection.
Not only that, but if your property is mortgaged, it may typically be a condition of your contract with the mortgage provider that you have adequate buildings insurance in place in order to protect both your financial interests.
So, what are the main aspects you might want to consider when buying your landlords insurance?
Buying the correct type of cover
- there are a number of different types of property insurance – from standard home insurance for owner occupiers, to cover for commercial property, and insurance specifically designed for landlords to any kind of let property, whether that is residential or commercial;
- perhaps as obvious as it might seem, it is important that you choose the correct type of insurance – landlords insurance – to protect your let property and the business in which it plays such a central role;
- if you have ordinary home insurance, but the property is in fact let to tenants, for example, you may discover to your cost that any subsequent claim is rejected by your insurer;
Buying from a specialist provider
- you might avoid any such costly error of course, by buying your cover from an expert and specialist provider of landlords insurance – such as ourselves here at Cover4LetProperty;
- an experienced provider such as this is well placed to identify the precise type, level and scope of landlord insurance you may need – and deliver a competitively priced quotation;
The building and its contents
- at the heart of your landlord insurance is the protection of the principal assets – the structure and fabric of the building itself, together with the contents you own – against a range of major perils such as flooding, fire, impacts (from falling objects or from vehicles), storm damage, vandalism and theft;
- because any of these risks might result in the complete destruction of your property, the total building sum insured needs to reflect the cost of rebuilding it as well as clearing the site if the property is completely razed to the ground;
- any contents which you own in the let property also need to be valued from time to time, to ensure that the cover provides sufficient funds for the replacement of lost or damaged items – either on a new for old basis, or after the deduction of an allowance for wear and tear;
Landlords liability insurance
- as the landlord and the owner of the property, you owe a duty of care towards your tenants, their visitors, anyone else who comes onto your property, your neighbours and even passing members of the public;
- if any one of these suffers an injury or has their property damaged through some contact with your let property, they may hold you liable and sue for damages – naturally, the size of any claim depends on the injuries or damage sustained, but cover under your landlord insurance is typically at least £1 million;
- it is important to consider, therefore, whether the landlord liability indemnity you are offered is sufficient for your needs;
Compensation for loss of rental income
- when you are running a buy to let business – or even budgeting as an accidental landlord – you rely upon the income stream generated by income collected from your tenants;
- if there is a major insured event, however, the property may be left uninhabitable, pending repairs or reinstatement of the building, its fixtures and its fittings;
- if it is uninhabitable, of course, you are no longer able to collect the rent or may need to find alternative accommodation for your displaced tenants;
- you might want to check whether adequate compensation is offered by your insurer for such loss of rental income, and, if it is provided, whether you consider the amounts – and the limits – to be suitable.
This is not an exhaustive list of all the factors you may need to consider when buying your landlord insurance, so, if you remain in any doubt, be sure to ask us.