If there’s one thing that strikes you when beginning your search for let property insurance, it’s just what a choice you have – there are so many products on the market.
So, how do you go about finding landlord cover that is suitable for your individual situation? Here are a few ideas that you may find helpful.
Why a careful comparison is essential
If you are a landlord, or soon to become one, insurance for your investment and for your buy to let business is typically a priority, so you are financially protected against the unexpected. Also, if you have a mortgage on your investment, then it may typically be a condition of you mortgage agreement that you always have landlord buildings insurance in place at all times.
Because landlord insurance (also known as let property insurance or buy to let insurance) is so important, it is essential to conduct a thorough landlord insurance comparison. 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 the insurers and 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 an attractive insurance deal?
Your buy to let insurance comparison is intended to reveal the answers to these and all your other questions.
How to go about making your comparisons
You may have identified some very good reasons for carrying out an insurance comparison – but going about it could be another matter altogether.
It is the kind of research you might be able to carry out yourself. 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.
What are you looking for when you compare buy to let property insurance?
Although your aim is to compare like with like, there are subtle – and sometimes not so subtle – differences between policies. So, you might be looking at some of the following:
- 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 – may be something you want to consider;
- when it comes to the building, the total sum insured needs to be enough to cover the possible requirement for completely clearing the site and 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 communal 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 of up to, say, £1 million, £2 million or more.
Some let properties insurance providers may also provide other benefits – some offer defined paid-for legal expenses cover should they arise from one of the insured risks.
However, each individual policy will typically have its own limits, exclusions, and conditions.
Conducting a comparison of available policies for your buy to let property may seem the obvious thing to do, therefore. It’s likely to prove an effective and successful exercise, even if it might turn out to be more difficult than it first appears – a time to call in the professional insurance providers.
How price comes into the equation
It is possible to compare let property insurance on several levels but perhaps the most conventional is cost.
Looking directly at the ticket price of any let property insurance is perfectly natural but it may also present the greatest chance of distraction.
The price may not tell you much about the policy. To effectively compare let property insurance, it’s necessary to look at what you’re getting for your money – namely, the cover itself and the value for money it represents.
The government-sponsored website Money Helper 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.
Certainly, the price will always be a factor if you are going to compare let property insurance but keeping that in perspective against things such as the cover, may be advisable. Only in that fashion are you likely to be able to decide what is going to give you the protection you need while keeping an eye on cost-effectiveness and value for money.
Remember unoccupied property insurance
It’s perhaps not always widely known that property insurance, including owner-occupier home buildings and contents insurance, and landlords’ insurance, typically contains special clauses relating to unoccupied property.
If your property is unoccupied for typically more than 30-45 consecutive days (depending on the insurer), you may find that your property insurance becomes invalid unless you have taken out unoccupied property insurance in advance.
It is something that may happen a little more easily than some would suspect – for example during property redecoration or if you are unlucky as a landlord and have extensive gaps between lettings.
Making the decision
At the end of the day, only you can make the decision as to which let property insurance is the most appropriate one for you.
Comparing the details of the cover provided as well as the conditions and exclusions should enable you to reach a decision – and it’s worth thinking, too, about some of the broader issues, such as:
- think about your specific business situation both in terms of the position today and how it might evolve in future – today, for example, perhaps you are letting exclusively to professionals but might in future consider moving into the student letting marketplace;
Look for options
- you might start to think about looking around in the marketplace for let property insurance policies that provide cover against both present and future risks;
- that exercise might prove to be a little time consuming, and you may save time by going to a specialist broker – such as ourselves – who will be able to provide landlord insurance advice based on our knowledge of several insurance providers;
Think about discounts
- many insurance providers offer certain discounts but some grant more – and more generously – than others, so be certain to make the most of those savings.
Relying upon and using your landlord insurance policy
It’s unlikely to be anyone’s idea of a good time but a careful reading of your insurance documents will be essential for any peace of mind that your policy continues to provide appropriate and adequate cover for your buy to let investment.
You are likely to find that landlords insurance policies vary quite widely in terms of the cover that they provide. This reflects the fact that:
- landlords and their properties may all be different – they come in all manner of types and sizes;
- 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, as we mentioned before, you may wish to take special note of the provisions under headings such as:
- subsidence – not all providers 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 an insured 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 those 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.
It is clear that landlords’ insurance policies may vary significantly one from the other – like it or not, reading them through may be a good idea! Or, alternatively, please let us help!
Let us do the legwork for you
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 our experience in making insurance comparisons on your behalf.
At Cover4LetProperty, we pride ourselves on having done just that since our business was founded in 1946. This means we can do all the legwork for you and provide what we consider are the most cost-effective solutions offering the specific cover you require.
So, if you need any assistance with choosing or comparing your landlord’s insurance cover, or you’d just rather talk to a ‘live’ person to get a let property insurance quote, then please feel free to get in touch, either via email or telephone number 01702 606301. We are always happy to help!