If you are a landlord, or soon to become one, insurance for your investment and for your buy to let business is likely to take on a priority.
Because you give it top priority, you probably want to conduct a thorough buy to let insurance comparison too. Here are the main reasons why you may want to do that:
- you may have a good idea about the kind of cover you need – to safeguard the physical property and aspects of the business you are running – but there may be items you have overlooked or simply not thought about that a comparison might reveal;
- you might already have a particular insurer or a particular product in mind – or find yourself simply renewing the same policy year after year – but only a proper comparison exercise is likely to identify all of the insurers and all of the many different products that might suit your needs and circumstances; and then
- there is the question of cost – are you paying more than the market rate or do you already have a good deal? Your buy to let insurance comparison may hold the answer.
How to go about it
You may have identified some very good reasons for carrying out an insurance comparison, but going about it might be another matter altogether.
It is the kind of research you might be able to carry out yourself, for example. Shopping around might help you spot the best buys, serve as a reminder for elements of cover you might have been overlooking so far, or identify products on the market you otherwise did not know about.
With so much at stake in the size of your investment in a buy to let business and the consequences of getting the insurance all wrong, you might want to consult experts in the provision of insurance for landlords and take advantage of their experience in making insurance comparisons on your behalf. At Cover4LetProperty, we pride ourselves in having done just that since the founding of our business in 1946.
The government sponsored Money Advice Service offers a reminder that the cheapest insurance policy is not usually the one that covers all of your needs, so refining just what those needs might be and the ability of the market to meet them might be a matter on which to consult an independent insurance broker.
What to look for
Having established some of the parameters, what might you be looking for when making your comparison – given the importance of comparing like with like:
- at the heart of the typical landlord insurance policy is protection of the physical structure and fabric of the buy to let property;
- although most policies are likely to cover major risks such as fire, flooding, storm damage, impacts from falling objects and so on, the exclusions – subsidence for example is not included as standard on some other providers’ policies – of may be something you want to take into account;
- when it comes to the building, the total sum insured needs to be enough to cover the possible requirement for completely rebuilding the premises in the event of a major insured incident;
- some policies also include in their standard provisions cover which is absent from others – a case in point might be the risk of malicious damage carried out by your tenants;
- whether you have fully furnished the let accommodation or have items you own mainly in the common areas, you might want to consider the contents insurance cover of your policy – and whether claims for theft, loss or damage are settled on a new for old basis or after the deduction of an allowance for wear and tear;
- because it is a business you are running, you are likely to want some form of protection against the loss of rental income if a major insured incident leaves the premises temporarily unfit for habitation – although many landlord insurance policies may offer compensation for such a loss, the maximum amounts payable may differ;
- a potentially critical component of your buy to let insurance is indemnity for claims alleging your negligence as the property owner or landlord – such claims from tenants, their visitors or members of the public may be substantial, so you might want to compare whether any given policy offers cover up to, say, £1 million, £2 million or more.
Conducting a comparison of available insurances for your buy to let property may seem the obvious thing to do, therefore, an effective and successful exercise may prove more difficult than it first appears – a time to call in the professional insurance providers.