Using landlords insurance policies

Posted: 4th Jun 2014

Reading through landlords insurance policies may be no-one’s idea of a good time. It may, however, be an essential step if you wish to have the peace of mind that your policy is providing you with appropriate and adequate cover for your buy to let investment.

You may find that landlords insurance policies may vary a fair bit in terms of the cover that they provide. This partly reflects the fact that:

  • landlords and their properties may all be different;
  • different providers may place different emphasis on their perceptions of the various elements of risk relating to landlords insurance.

When selecting a let property insurance policy, you may wish to take special note of the provisions under headings such as:

  • subsidence – not all providers may offer this element of cover as standard;
  • trace and access cover – without this you may find yourself responsible for the cost relating to repairs for damage caused by a tradesperson locating and fixing another issue;
  • landlords loss of rental income – tenants moving out of your property because it has become uninhabitable following damage in a storm or fire, for example, may hit you in the pocket unless you have a landlord insurance policy which provides compensation, perhaps up to certain limits, in these circumstances;
  • malicious damage caused by tenants – may not be provided as standard across the board but it is in some letting insurance policies so you may wish to look out for it.

You may also wish to remember that buildings and contents cover for your property may only be valid when you have tenants in it. As soon as your property is unoccupied for an extended period of time, you may wish to consider vacant home insurance.

Different landlords insurance policies may specify different timescales for these vacant periods but you may find 30 or 45 consecutive days to be a fairly typical breakpoint.

The reasons why your property is empty may be varied and may include:

  • renovation or refurbishment work being carried out;
  • difficulties in finding tenants or delays in them moving in;
  • legal issues which may have to be resolved before you can let the property out (probate or a divorce settlement etc);
  • and since this type of cover may typically be required for owner occupiers as well – extended business trips or holidays.

You may additionally find that unoccupied property insurance may have some specific terms and conditions relating to its cover.

These may include arranging for the property to be visited on a regular basis to allow routine maintenance to be carried out and to ensure that minor problems may be identified and fixed before they develop into something more serious.

It may be fairly clear that landlords insurance policies may vary significantly one from the other – like it or not, reading them through may be a good idea!