A standard Landlords policy will typically provide you with cover for property damage, liability and loss of income however, there are many other covers and restrictions within a policy that you may be unaware of as a landlord.
The following restrictions are guidelines to keep in mind when purchasing your Landlords Insurance and we would suggest you always check your policy in-depth to find out the specific details of these.
Cover that may be restricted:
- General wear and tear or, usually, damage that occurs slowly over time like damp or rot.
- Loss or damage resulting from the property being used for an illegal purpose.
- Damage that comes from exposed water tanks or pipes that have not been lagged.
- Frost damage in any outbuildings (including garages).
- Malicious damage by the tenant if this does not come as standard.
- Theft by tenant if this does not come as standard.
- Accidental Damage if this does not come as standard.
- Cover can be restricted or even cancelled if the property is unoccupied for more than 30 days.
Currently, there is no legal requirement for UK residential landlords in England or Wales to have any form of insurance policy. Most policies are available to provide ease and reassurance, nothing more. However it really doesn’t make any sense to pay a small premium in comparison to lose your entire investment by an accidental fire. Not to mention, you’ll still be liable to pay the mortgage- imagine how demoralising that would be, paying off debt for a pile of burnt rubble.
Below is a prime example of an incident where a client didn’t check the cover they purchased and unfortunately suffered a very large loss at their own expense.
Buy-to-let nightmare: £56,000 of damage and my insurer won’t pay.
A retired couple found their rented property had been used to grow cannabis.
After finally managing to evict the tenants it was found that the property had significant damages with losses reaching £56,000, which their insurer would not cover.
The couple became concerned after the local couple renting the property stopped paying their rent after the husband lost his job, despite receiving housing benefits from South Hams District Council. The owners of the property decided to inspect the property and were shocked to find the tenants had boarded themselves in and would not allow access to the property. The house exterior was in a terrible state with rubbish and furniture strewn all over the garden.
At this point, legal proceedings were taken and the couple renting the property were finally forcibly evicted 5 months later, at a cost of £2,500 to the property owners. After finally gaining access to the property the couple were distressed to find significant damages internally – extensive water damage to walls and ceilings caused by extremely high heat and humidity levels caused from growing cannabis.
An assessor was called to inspect the damage as a claim was to be made but it was highlighted that the insurer had only sold the couple a standard home insurance policy rather than a specialised landlord insurance cover, which offered the couple no protection against damage by tenants.
Extract taken from The Telegraph 18 October 2014 written by: Nicole Blackmore.
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If you have any concerns about your policy or are in need of purchasing landlords insurance cover, contact us today.