Landlords Buy To Let Insurance
What is Landlord Buy to Let Insurance?
General home buildings and contents insurance simply isn’t adequate to cover you for all the third party risks that you could encounter as a landlord. Having specialist landlord insurance (also known as property owners or buy to let insurance) ensures you limit your exposure to risk, protecting your investment and your financial wellbeing.
This type of insurance can provide cover for; physical damage to the property, damage to your contents, liability to tenants, visitors or third parties that could injure themselves, loss of rent, malicious damage caused by tenants, tenant disputes and injury to anyone you employ to carry out general maintenance.
What can Landlord Insurance Cover?
- Buildings: Cover for physical or accidental damage.
- Contents: If you have any contents within the property i.e. carpets, curtains, white goods.
- Loss of rent and/or alternative accommodation: If the tenants could not stay in the property.
- Accidental damage
- Malicious damage: Including caused by tenants.
- Property owner’s liability: Cover if your tenants or visitors are injured as a result of your negligence.
- Employers Liability: If you employ a maintenance person to deal with your properties.
- Legal Expenses: If you have to defend yourself against a legal action.
- Insured perils: Including escape of water, flood, fire, storm, subsidence, impact, lightning, explosion, or burst pipes
- Inflation protection
- Trace and access of leaks: The cost incurred to find the leak and put right the damage.
What else do I need?
- Rebuild Cost Assessment: A small one-off payment to obtain the correct rebuild valuation and ensure you’re not under or over insured
- Cyber Insurance: If you hold any tenant information or take any card payments
- Directors Insurance: If you run your property business as a limited company and want to protect your personal assets.
Why do I need Landlords Insurance?
Legally you don’t need it but you should have it! If you’re fortunate enough to have surplus cash to cover all damages or a total loss and the time and expertise to sort a claim – then you probably don’t need this policy. But if like most people, you would prefer that a claim didn’t directly hit your bottom line and could do without the stress or time commitment of sorting a claim, this policy is worth every penny.
Some mortgage lenders may stipulate that you must have this insurance. That aside, you have most likely invested a lot of money on your property and will naturally expect a return on your investment one day. Protect your assets and retirement fund with the right level of insurance cover.
What is the difference between market value and buildings declared value?
The market value of a property is based on the building, the plot it sits on and its location – it is the sale price of a property. The building’s declared value is what it would cost to rebuild the property in the event of a total loss i.e. a property being destroyed by fire. The market value is usually higher than the declared value. This is because you already own the land and its value is not included in the buildings declared value.
What is the difference between loss of rent and alternative accommodation?
Loss of rent is payable to the landlord when the property is damaged from an insured peril, i.e. fire and deemed uninhabitable, (usually where the bathroom or kitchen cannot be used) and the tenant will need to move out. The landlord can claim the same rental income they would have received from the tenant, from the date of the loss up to when the works are complete. Alternative accommodation can be used to house your tenant into a similar property for the duration of the works. The tenant would still pay you rent so that you don’t miss out on the rental income. You cannot usually claim both loss of rent and alternative accommodation, so landlords usually opt for the loss of rent cover.
How do I know what to insure my property for?
Unless you have had a recent survey carried out by either your mortgage company or a Royal Institution of Chartered Surveyors (RICS) qualified surveyor, you will be guessing. We are not allowed to advise on this element (our FCA authorisation does not extend to this), but we do have a facility to provide a RICS qualified desktop rebuild cost assessment.
Types of Tenants or Properties we can cover
- Houses or other residential premises
- Commercial premises
- Blocks of Flats
- Properties let to professionals, students, DSS (agreement between landlord and tenant)
- Airbnb, Rent to Rent / Sub lets, Asylum Seekers
- Non standard construction
- Unoccupied / Vacant properties
- Properties awaiting probate
- Properties that have suffered previous subsidence or flooding
- Landlords and/or property owners that have suffered previous financial debt including bankruptcy, insolvency or CCJ’s.