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Looking at landlord insurance

Getting the most suitable and cost-effective landlord insurance for your own unique circumstances is obviously important. Here we discuss some of the things you need to know when getting let property insurance.

Firstly, not all buy to let insurance policies are the same or do the same job. You need to be sure that the one you opt for is the one that matches your needs, requirements and budget.

The different types and variations of landlord insurance may appear to complicate matters somewhat. But since they are all that may stand between you and serious financial losses of one of your major assets, it may be advisable to ensure that you are fully familiar with them – and all the related issues that may arise.

What landlord insurance covers

Although individual policies may vary – sometimes quite considerably – in the detail, the majority are based on a few common headings of risk:

Building insurance

  • this is a conventional and typically well-understood form of cover, which is designed to protect the structure and fabric of the building, its fixtures and its fittings against loss or damage – from a wide range of common perils such as fire, flooding, storm damage, escape of water, impacts, vandalism and theft;

Contents insurance

  • this may not be strictly necessary if you are letting out your property on an unfurnished basis but if it is furnished, this cover may be essential if your movable property is to be fully protected;
  • note that different policies may apply different definitions of what is a fixture and what is movable content – so, if you decide to skip on landlords contents cover, it might be wise to be clear that you understand that what you consider to be fixings and fixtures is the same as your policy’s definition;

Landlord liability insurance

  • if a tenant, one of their visitors, a neighbour, or even a member of the public is injured or has their property damaged through some connection with your let property, you may be held liable and sued for compensation;
  • this heading of cover grants you indemnity against such claims;
  • because the claims have the potential for assuming substantial proportions – especially if physical injuries are concerned – the amount of cover is typically a minimum of Β£1 million, but here at Cover4LetProperty we offer cover for claims of up to Β£2 million as standard (with the option of increasing this to Β£5 million, if required);

Compensation for loss of rental income

  • your let property is at the heart of a business – a business which relies on the stream of income generated by the rents you charge;
  • if a serious insured event occurs, however, the premises may become temporarily uninhabitable – and unlettable – pending repairs and reinstatement, with the result that your normal income stream is disrupted;
  • your landlord insurance policy may provide financial compensation – up to prescribed limits – for this loss of rental income;

Subsidence

  • in the past you may have found that subsidence cover was included pretty much, as standard, as part of buildings cover but that these days it may not always be the case – here at Cover4LetProperty, however, we continue to include cover against the risks of building subsidence as standard in the policies we arrange;

Malicious damage

  • while most tenants may take good care of your building and its contents, there may occasionally be some who do not – so, a policy which offers cover for malicious damage by tenants, may offer you the peace of mind of being covered financially in such a situation and those we arrange here at Cover4LetProperty do just that;

Unoccupied property insurance

  • this is typically a separate, standalone form of insurance cover that may be required in situations where your property is going to stand empty and unoccupied for a while;
  • you may hope to have 100% occupancy of your buy to let property but there will always be times though where this is just not possible – perhaps you are carrying out redecoration or refurbishment. Or, you may be experiencing difficulties in finding new tenants, or they are delayed moving in;
  • in these situations, if your property is empty for 30 to 45 consecutive days or longer (the exact period depending on your insurer) then you may need to consider unoccupied property insurance, which provides protection for the risks that are more prevalent in an empty property – for example, minor problems going unnoticed and causing major damage, or unlit windows and an increasingly untidy garden attracting thieves or vandals;
  • it may be prudent to note that this cover may be required even if you have had no control over the situation that has resulted in your property standing without tenants;
  • even with unoccupied property insurance in place, you may be required to visit your property regularly while it is empty to check that everything is okay and to carry out any necessary repair work – you may also be asked to keep a record of these visits and the work undertaken.

Types of tenant

One further area where policies may differ in important respects is in their approach to certain categories of tenant.

Some landlord insurance policies may impose restrictions on the types of tenants that you can have in your property, excluding categories like students, DSS, asylum seekers or other groups from cover.

If this is likely to be an issue for you, then you may wish to look for a policy where no such restriction exists. But rest assured that you will be completely protected by any landlord insurance policy arranged by us since we do not discriminate against any type of tenant.

Finding the landlord insurance policy that suits you and your property

We have suggested just a few examples of differences in landlord or buy to let property insurance cover that may make a difference to you. Taking some time to read through landlord insurance quotes to ensure that you understand what’s covered and what’s not, might help you to find the landlord insurance cover that’s most appropriate for you.

The price of your insurance premiums is, clearly, going to be an important consideration. Beware, however, that relying exclusively on price alone may result in you buying a policy that may suit your pocket but which may not provide you with the cover you need in the event of a problem.

How much is landlord insurance likely to cost?

The answer is similar to the one about how long is a piece of string – it all depends.

It may be influenced by factors such as:

  • the type of property you have;
  • whether you let it on a furnished or unfurnished basis;
  • the level of cover you need for contents;
  • the value of the property in terms of how much it would cost to rebuild it completely from scratch (as well as clearing the land and surveyor costs in the event the building is completely destroyed); and
  • the level of voluntary excess you may be prepared to accept.

So, before you may be able to think about how much your landlord insurance is going to cost, you may first of all have to consider the above factors and give some thought to those elements of cover which may not be included in all buy to let policies.

As we have seen, some of those potentially important differences and exclusions might include cover for:

  • malicious damage by tenants;
  • loss or damage from subsidence; or
  • types of tenant – some policies may exclude students and welfare claimants.

When thinking about how much landlord insurance is going to cost, you may also have to bear in mind that if your property is standing empty for extended periods of time – perhaps longer than 30-45 consecutive days – then you may typically need to get an unoccupied property insurance quote.

So, questions about the cost of your landlord insurance are unlikely to be answered in any meaningful way until you know what you are looking for. We would be only too happy to help you get the answer you need, so please feel free to get in touch, either via email on cover4letproperty@alanblunden.co.uk, or by telephone on 01702 606301.

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