Key facts relating to buy to let property insurance

Posted: 2nd Jun 2014

Buy to let property insurance is a form of buildings and contents cover designed to specifically meet the requirements of landlords.

Sometimes the term landlord is not well understood and sometimes unfairly brings with it a certain Dickensian connotation. However, the fact is that anyone can instantly become a landlord the moment they:

  • start to rent out a property;
  • rent out rooms or areas of a property they continue to occupy;
  • rent out their home infrequently for things such as holiday peak-periods etc.

Once you cross that boundary, your insurance requirements automatically change too.

For a start, any existing owner-occupier home buildings and contents insurance will become invalid. It’s advisable to recognise that and deal with it in advance rather than wait until you have to make a claim and find the claim being rejected.

What you need is buy to let property insurance that provides buildings and contents cover for landlords.

Why is this insurance different?

It’s all to do with the risks involved. Insurers typically see the risks associated with a rental property as being higher than those of an owner-occupied one.

This isn’t just a question of complicated statistics. Common sense may tell you that, for example, however responsible, tenants may not be quite as quick as an owner-occupier to spot and deal with a potential problem such as weeping water pipe joint.

In fact, landlords’ insurance provides more than just buildings and contents cover.

Another thing arising from having tenants in your property is that you may be more at risk of being sued for third-part liability type accidents and injuries.

If your tenants, their visitors or in fact a passing member of the pubic, suffers injury or property damage as a result of your building, then they may sue you for compensation.

In the case of tenants, if they have an accident that is adjudged to have been as a result of a maintenance problem with your property, the awards against you potentially might be very significant indeed.

That’s also an area where buy to let property insurance will need to offer you protection that you consider adequate.

One last key fact about let property insurance – don’t forget that as a rented property yours may be empty from time to time in between rentals or it if is being re-decorated etc.

Empty is typically defined in property insurance as a period of more than 30 consecutive days unoccupied (this may vary depending on your provider). Typical landlords’ insurance won’t cover empty properties – in fact the same things may also apply to owner-occupier policies.

What that means is that to ensure you have the most suitable cover for your property, it may be prudent to add unoccupied property insurance when the need arises. Failure to do so could invalidate your existing insurance arrangements.

Buy to let property insurance – supplemented by empty property cover if circumstances dictate – may offer you the peace of mind you need.