If you’re a landlord and thinking about landlord’s insurance, you may find the following tips to be of some use.
- Unoccupied property insurance. Typically, buy to let insurance policies won’t cover property that’s unoccupied. They may consider that to be any property that is unoccupied for more than 30 consecutive days.
That may happen easily if you’re between lets or just having your property converted or renovated. Looking at unoccupied property insurance might be highly advisable – remember that your existing buy to let insurance may become invalid once a property is unoccupied.
- Legal costs. Certain situations may, unfortunately, result in you becoming embroiled in a legal battle. Some policies may cover those costs where they arise from one of the insured risks (e.g. a third-party injury claim arising from your property). Others may not – it’s something worth checking given those costs may be high.
Bear in mind too that you typically may have legal costs even if you win the claim brought against you. Again it may be worth checking your buy to let insurance policy to make sure that it provides cover.
Note that most policies typically do not cover legal costs arising from actions against tenants for rent recovery etc.
- Loss of rental income. If your property becomes effectively uninhabitable due to an insured risk, then you may find yourself to be seriously out of pocket due to a loss of rental income. Some landlord’s insurance policies – including our own – may offer to cover you against that (up to set limits) and it may be cover worth having.
Such cover typically won’t cover tenants that default on rent payments.
- Contents cover. Don’t give in to the temptation of understating the cost of your contents simply to try and keep your premiums lower. Do a room-by-room walk-around to accurately estimate your contents and use that value.
Cutting down on your contents estimate may seem like a good idea – right up until the point you have to try and replace them for the amount you under-insured them for!
- Excess. It may appear to be an obvious point but look out for what’s called the excess.
That’s the amount the insurer may insist you contribute towards the cost of a claim. It’s sometimes called ’the first part’ of a claim and the amounts may vary considerably between landlord’s insurance providers.
- Owner-occupier cover. Don’t be tempted to try and use a standard home buildings and contents insurance policy if you’re actually a landlord.
Any owner-occupier insurance you have will typically become immediately invalid the moment you start obtaining rental income from your property – or even a part of it. That may even apply if you rent it out infrequently for holiday use etc.
If you’re obtaining rental income from property then you must have appropriate landlord’s cover.
Landlord’s insurance may prove invaluable to you and hopefully the above tips will help you choose a policy that’s suitable for you.