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What you need to know: let property insurance quotes

If you are a landlord, you will want to take the best possible care of your property – and the most effective way of providing that protection is typically let property insurance. Indeed, if you have a mortgage on the property, then it will generally be a condition of your mortgage agreement that you have adequate buildings insurance in place at all times.

Here we discuss why landlords’ insurance is so important as well as considerations when getting your let property insurance quote.

It might be helpful to counter a common misconception from the outset – and that is about the cost of your let property insurance premiums. Understandable as it might be to search out low-cost landlord insurance, it’s worth remembering that the concept of “cheap” may mean different things to different people.

To some, it may mean the lowest possible cost cover, irrespective of the benefits provided. To others, it may mean a landlord insurance policy that provides the maximum cover at a price that they consider is reasonable.

You will have your own ideas about the more appropriate approach, of course, but what you are likely to be looking for is good value for money rather than rock-bottom prices.

Landlord insurance vs home insurance

Insurance needs to be in place – but not just any type of property insurance. You must ensure it is purpose-designed insurance for let property.

Standard home buildings and contents insurance suitable for owner-occupiers is not appropriate for rental properties. Even if only part of your property is being rented out, any existing owner-occupier home insurance cover you have may immediately become invalid. This reflects a change in use of the property from your principal place of residence to what is, essentially, a buy to let business asset – and the risks and perils for the respective properties are significantly different.

Although buy to let insurance is typically a little more expensive than owner-occupier home insurance cover (the cost for the former typically reflects the higher risk of loss and damage), attempting to economise by getting standard home insurance may prove pointless. Insurance companies have ways of establishing the occupancy status of your property at the time the incident took place that led to your claim.

Attempting to make a claim against an owner-occupier home insurance policy for a property you know to have been rented out, may involve making a false declaration – something that may be an offence and which may make it difficult for you to obtain insurance in future.

Am I a landlord if I rent out a room in my home?

In any situation where you start obtaining rental income from your property, you have become a landlord:

  • that might apply even in what you may consider to be a relatively trivial situation, such as letting out a single room or two in your own house;
  • once you cross the threshold into a landlord’s activities, you may find that any existing buildings and contents cover you have on the property may become invalid, if it was designed for owner-occupier use;
  • as we mentioned above, typically, you cannot use an owner-occupier policy to protect your buildings or contents in a situation where you have tenants;
  • in some cases, this might be the case even if you are letting out a room on a very temporary basis during the holidays or university term, for example. You might even find that this definition applies if you are letting out rooms to someone you consider to be a friend or relative – the governing factor may be whether or not they are paying you rent;
  • keep in mind that landlord insurance might not be your only consideration when making the transition from owner-occupier to a landlord. In some parts of the United Kingdom, you may also need to be formally registered with the local authorities;
  • once you take out landlords’ cover, you should find that you obtain a range of protection in addition to what you may have previously considered being normal in the context of owner-occupation. That is partly why a specific landlords insurance policy is required;
  • it is very important to remember that any landlord insurance policy might be put at risk if you fail to comply with the legal and regulatory framework governing the use of property for rental income;
  • examples of that might include things such as gas safety inspections, electrical inspections and the provision of appropriate safety equipment.

make sure that you discuss in advance with your landlord insurance provider any situation where you plan to use your property for multiple purposes in addition to letting. For example, running a small workshop on the ground floor, whilst letting to tenants above, may be an issue for your cover unless you have discussed it with your policy provider.

What does let property insurance cover?

Although let property insurance occupies a particular niche in the wider property insurance market, there are still many variations in the detail of the cover offered by different policies. Bearing that in mind, the following are the typical broad headings of cover provided:

Buildings insurance

  • typically, this can protect your property financially from the effects of damage from a number of insured events such as fire, floods, storms, earthquakes, vandalism, and theft;
  • you may wish to bear in mind that the level of buildings cover that you may need should reflect the total cost (including architects’ and surveyors’ fees, searches, site clearance and the like) of rebuilding your property, rather than the amount of your outstanding mortgage or the sum you bought the property for;

Contents insurance

  • landlord contents insurance. As the name suggests, landlord contents insurance covers your furniture, equipment and other moveable objects that constitute part of your property;
  • if you are letting property on an unfurnished basis, strictly speaking, you may not need this type of cover included on your policy – but, before deciding to dispense with it entirely, it might be sensible to ensure that, what you consider to be fixtures and fittings (and hopefully therefore covered by your buildings policy) are also similarly seen as such by your insurance provider;
  • there may still be moveable items in the communal areas that might need to be insured;

Landlord liability indemnity insurance

  • if a member of the public or one of your tenants suffers personal injury or damage to their property, which they consider to be attributable to some failing on your part as the landlord – your failure to maintain the property in a safe condition, for example – they may sue you for damages;
  • you should be clear that if a court happens to agree with their interpretation of events, you may find staggeringly high sums awarded against you;
  • landlord liability indemnity insurance offers protection against such claims – typically offering cover of at least £2 million, and often considerably more;

Compensation for loss of rental income

  • we have established that your let property is effectively a business asset – and one that relies on the income generated by your collection of rents;
  • if a serious insured incident leaves the property temporarily uninhabitable, pending repairs and reinstatement, the rental income is at risk, and you stand to suffer a financial loss;
  • let property insurance typically incorporates an element of compensation for such loss of rental income.

Unoccupied property

It is important to note that if your property stands unoccupied for more than 30-45 consecutive days, you may require additional protection in the form of unoccupied property insurance to ensure your property is fully protected.

Unoccupied property insurance is required because of the extra risks that a property may face when it is not occupied. This could be from thieves, vandals or perhaps a small problem that, left unfixed, may turn into something more serious over time.

Please read our Guide to Unoccupied Property which considers the relevant insurance issues in some detail.

Finding the most appropriate landlords’ insurance policy

In your search for let property or landlord insurance, you might be initially overwhelmed by the sheer choice of competing providers and their respective policies.

Here are a few tips that may help you identify those policies likely to be appropriate to your particular needs and circumstances:

  • some effort is required – although the market for this type of policy is vibrant and highly competitive (something that is all to your good), you won’t be able to take advantage of that unless you look at a number of different options rather than simply renew your existing annual policy out of habit;
  • you may wish to consider selecting a higher level of voluntary excess on your policy and potentially enjoy a discount on your landlord insurance premium;
  • improving your property’s security might also be an option – some policies may welcome the fitting of things such as extra locks and/or regularly serviced intruder alarms (in other words, security measures that are above and beyond those stipulated within your landlord insurance policy documentation), and offer discounts in return;
  • if you are letting your property on an unfurnished basis, you may wish to question whether or not you need to be paying for contents insurance – in some cases, you might be able to obtain, in some cases, a more competitive deal if you are only paying for buildings insurance and third-party liability cover;
  • try to think in terms of cost-effectiveness rather than getting just the cheapest landlord insurance available – it can be very difficult to compare two policies based on their ticket price unless you have an understanding of the cover provided by the landlord insurance policies concerned;
  • an illustration of this might be given by subsidence insurance, something that might be provided as standard by some policies (such as those provided by ourselves) but not by others.

We understand that as a busy landlord, you don’t want to spend substantial amounts of time thinking about your insurance cover. Yet treating the subject too lightly might cause you to miss some opportunities for potentially improving your cover whilst at the same time reducing your costs. So, thinking about some of the above points and others like them might be in your best interests.

What is the best insurance company for let property insurance?

There is no easy answer to the question. What you think is the best landlord insurance company for you may be completely different from that of another buy to let investor. That is because:

  • your business insurance requirements may be completely different to that of another – for example, you may wish to insure a bungalow while another investor may be looking to insure a portfolio of let properties;
  • as we have highlighted, not all landlord insurance policies are exactly the same – not only do landlord insurance providers vary in terms of price and the service they offer but the policy features and benefits may be different too;
  • that is why it is important to compare insurance policies on a like-for-like basis.

Do you have any questions or need help?

Using the services of a landlord insurance broker, such as ourselves here at Cover4LetProperty, means that you can access a wide range of insurance policies from a number of insurance companies – leaving you free to cherry-pick the cover that is most appropriate for you.

Please call our friendly team on 01702 606 301. We’d love to help!

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