Have you just found yourself to be an accidental landlord? Perhaps you inherited a property which you’ve decided to let out? Or perhaps you’re having difficulty selling your previous home and want to let it out for a while? Then you might have slipped into the role as an “accidental landlord”.
On the other hand, your investment in buy to let property might have been an entirely conscious and focussed decision, with a view to creating a thriving and expanding business.
Whether you are an “accidental” or a “professional” landlord, though, the property needs the protection of buy to let insurance, which is another name for landlord insurance.
What tips might be given to both of these types of landlord?
Don’t rely on your standard home insurance
- the first – and probably most important – tip is to make sure that you arrange specialist, purpose designed landlord insurance and do not rely on any home insurance you might have arranged when you were living in the property yourself;
- when the property is occupied by tenants, the risks are quite different and you are running the letting as a business, not as your own home;
- the distinction is likely to have been apparent if you needed a mortgage to help buy the property – a mortgage on your own home is quite different to a buy to let mortgage, explains the Council of Mortgage Lenders;
- reliance upon any standard home insurance when you are in fact letting the property to tenants runs the risk of your having any claim flatly rejected by your insurer;
How can I be sure I have the correct type of insurance?
- landlord insurance occupies something of a niche in the general insurance market;
- as such, you might want to reap the benefits offered by a specialist – such as us here at Cover4LetProperty – with years of experience and expertise in the provision of landlord or buy to let insurance;
- this may help you to avoid potentially expensive errors or shortfalls when it comes to arranging the insurance cover you need;
Properties comprising several flats
- whether you own the whole of the freehold to a property comprising several flats or have a share in the freehold, landlord insurance is still required;
- as a discussion thread on the website Landlord Zone, suggests this subject appears to give rise to an element of confusion and is further reason for consulting a specialist insurance provider likely to be well versed in the complexities of arranging such cover;
Tips on the elements of cover you may need
- the structure and fabric of the property you own is exposed to potentially very serious risks – such as fire, flood, impacts, storm damage, vandalism and theft – against which building insurance is the appropriate defence;
- it is worth noting that some insurers include cover for malicious damage caused by tenants or their visitors as a standard element of cover, whilst others might charge an additional premium for this important element of security;
- to make sure that you are prepared for even the worst case scenario resulting in the complete loss of the building, it is necessary for the total sum insured to cover the cost of reconstruction;
- the level of contents insurance you may need depends, of course, on just how much you own – insurance of any contents owned by the tenants is entirely their own responsibility;
- in the majority of cases, even a minimum level of contents insurance is arranged by landlords to cover such items as carpets and curtains in otherwise unfurnished accommodation;
- the importance of public liability insurance – in this instance, more commonly referred to as landlord’s liability insurance – needs to be stressed, since it is likely to be even more critical to the landlord than the owner occupier;
- landlord liability insurance provides indemnity against claims from tenants, their visitors or any member of the public who may suffer a personal injury or have their property damaged as the result of the landlord’s alleged negligence – such claims may assume very significant proportions and indemnity typically provides at least £1 million of cover or even more;
- as already mentioned, and even as an accidental landlord, you are letting the property by way of a business proposition that relies upon a steady stream of income from rents;
- since there may be a loss of rental income following an insured event which leaves the property temporarily uninhabitable, landlord insurance typically provides an element of compensation for such loss;
- attending to essential repairs and maintenance may prove a time-consuming – not to mention expensive – part of the landlord’s role, especially where action needs to be taken as a matter of urgency;
- to help cover any such event, you might find a relatively inexpensive domestic emergency assistance policy proves worthwhile.
Whatever type of landlord you may be, landlord insurance is likely to play a central role in protecting your property against a range of risks and perils. Keeping in mind these tips and suggestions may help you secure the cover you need – at a competitive price.
Further reading: Guide to being a landlord.