If you want to compare buy to let property insurance, you may be wondering what sort of things you might look at. We’d like to share with you some of our ideas and suggestions.
Make sure you have the appropriate cover
Don’t be tempted to try and use a standard home buildings and contents insurance policy if you’re actually a landlord – it is a trap into which a so-called “accidental” landlord, in particular, might fall. That is a property owner who has become a landlord almost by chance after having inherited a property, let’s say, or who decides to let a home they once occupied before eventually selling it.
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, AirBnB or even if you have a lodger etc.
If you’re obtaining rental income from a property, then you must have appropriate landlord’s cover.
Protecting your bricks and mortar
Landlords buildings insurance for your buy to let property provides you with protection against the financial impact of having to carry out repairs right through to the complete rebuild of your property. Getting the most appropriate level of cover in place may be critical.
Buildings insurance may typically cover you against damage from things like:
- fire and smoke;
- storms and flooding;
- vandalism and theft;
- impacts – by vehicles or from falling objects such as trees and their branches.
Many people may think that buildings insurance only applies to getting things repaired that have been damaged in floods, fires or even earthquakes and for many claims, this is indeed the case.
However, if your property is damaged beyond the point where repair or reinstatement is feasible, then your property may need to be rebuilt entirely.
Accurately assessing the value of your property from a “how much would it cost to rebuild it completely” perspective is an essential part of any insurance decision.
Being faced with a rebuild and finding that your buildings insurance does not cover all of the rebuild costs may spell disaster. Getting professional advice about a realistic valuation for your building insurance (as well as allowing for the costs involved in clearing the site) may typically make very good financial sense.
This is an important risk to the structure of many buildings, but cover is no longer guaranteed to be a standard component of buildings and contents insurance as it once perhaps was. Some policies – such as ours – cover it and others may not – checking may be advisable.
After a number of stormy winters and torrential rain, there have been increasing concerns about flooding, and some insurers may include special provisions and limitations in their policies if your property happens to be located in an area known for flooding.
Other insurance providers may not have such conditions, or their conditions may be more agreeable to you.
The joint initiative by the government and the insurance industry, called Flood Re, to establish a scheme of reinsurance for insurers is helping to reduce flood insurance premiums for tens of thousands of homeowners.
Protecting your contents
If you rent out your property on a furnished basis, then this could represent a few thousand pounds worth of your property (the contents) in someone else’s care. You may wish to protect those belongings with contents insurance so that if items have to be replaced, then you have some financial help.
Landlords contents insurance is typically available on:
- a new for old replacement basis, where the insurance cover will provide funding for a new item;
- on a market value basis, where your insurance will only cover the current second-hand value of the item concerned.
Which is suitable for you will depend on the condition and value of your contents and landlord insurance advice may help you find the most suitable solution for you.
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 estimate your contents’ value accurately 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!
Protecting your bank balance
If someone is injured as a result of your property, for example, by a falling slate or a loose floorboard, then they may decide to sue you for damages. Court awards in these situations may be substantial, and even if you win, you may still be faced with the prospect of paying for your legal defence.
Public or landlord’s liability insurance may often be provided as part of your buy to let insurance policy and may help protect you against such claims. Some policies may also meet those legal costs (up to pre-agreed limits).
Specialist buy to let insurance providers such as ourselves will only be too happy to share our knowledge with you and give you some landlord insurance advice. This may help you to rest that bit more comfortably at night.
Compensation for loss of rental income
Your buy to let property is a business asset first and foremost – it is the asset which generates a rental income from your tenants.
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.
Not only does this compensate you for lost rental income but buys you valuable time in which to carry out repairs and reinstatement of your damaged let property during the period that your tenants have needed to move out.
The compensation may be payable following an insured event – it is unlikely to cover eventualities such as the rental income lost from tenants who abscond and leave significant rent arrears.
If you’re unfortunate enough to have tenants or their visitors who intentionally damage your property, some policies may cover against this risk
The cover is by no means included as standard in all landlord insurance policies, but it is in those we arrange.
Legal fees and 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.
Win or lose in a case of third-party action; you may find yourself facing very significant legal bills and expenses. Not all landlords’ insurance companies will cover that sort of cost, though some will, providing it arises from an insured risk.
Note that most policies typically do not cover legal costs arising from actions against tenants for recovery of rent on which they have defaulted or for other breaches of their tenancy agreement.
Unoccupied property insurance
Typically, buy to let insurance policies won’t cover property that’s unoccupied. Insurers might consider your property to be unoccupied if there has been no one living there for 30-45 consecutive days (the exact period may vary from one insurer to another). And that may happen quickly 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 vacant.
It might appear 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 successful claim, and the amounts may vary considerably between landlord’s insurance providers.
By accepting an additional voluntary excess, you may reduce the cost of your buy to let insurance premiums – although you may then need to make a more significant contribution towards the settlement of any claim.
Compare let property insurance
The sums of money you have invested in your property are unlikely to be trivial.
It, therefore, makes sense to compare landlords’ insurance policies closely.
Of course, you might attempt the comparisons yourself, but why not draw on our experience and expertise here at Cover4LetProperty and let us make those comparisons on your behalf – so we can search for the most competitively-priced cover that suits your particular needs and circumstances.
Taking advice from the specialists in let property insurance you may be certain to cover all the things that can happen to your property. Drawing on that advice and getting landlord insurance advice may then help put your mind at rest that you have done all that you can to keep your investment safe.
Arranging your let property insurance online
At Cover4LetProperty, our entire process is made all the more straight forward through the ease of arranging your let property insurance entirely online.
Being able to arrange your landlord insurance online may make it easier than you think to arrange cover for your buy to let property.
The days when you may have had to traipse up and down the high street if you were looking for cover are thankfully long gone.
You can now look at what providers are offering and compare landlord insurance online, using a service such as ours – and, hopefully, you’ll find a policy that matches your own particular circumstances.
Getting the best landlord insurance
When it comes to the best landlord insurance for buy to let properties, you may wish to bear in mind that what is best let property insurance for one landlord may not be best for you.
Your needs for your property may very well be unique. Being tempted to select a policy based on a banner headline price alone may not be the most effective strategy when it comes to insurance cover.
Acquainting yourself with what the cover actually provides may typically help assure you that your cover is suitable for your situation.
Of course, if you’d rather talk to someone about your let property insurance, rather than comparing insurance online, please feel free to give us a call – we’d be delighted to help.