Complete Guide to Let Property & Landlords Insurance
One of the most important things for any landlord is having proper landlord insurance cover.
Failure to do this could prove to be a very costly mistake. As a landlord you are effectivley running a property business, as such your main asset is your buy-to-let investment. It is vital therefore that you safeguard the value of your property investment with the correct landlord insurance should disaster ever strike.
Do I need specialist landlord insurance?
Because of the nature of buy-to-let property, it is imperative that you have specialist landlord insurance. This is because household policies offer no cover for buildings, contents and landlord’s (property owner’s) third party liabilities whilst the property is being let out.
Things to watch out for with landlord insurance.
There are a few things that the novice or first time landlord should do when insuring their property with landlord insurance.
1. Make sure that your landlord insurance policy includes employers’ liability cover. Most landlords will not think they need to be insured for this, but if you engage anyone to do work on a labour only basis (i.e. they do not supply their own materials) and especially if you pay them in cash, it is likely you will be regarded as their employer in the event of them being injured whilst working on your property. It is also worth mentioning that insurance for employers’ liability is compulsory by law so if you are deemed to have employed someone you could also have a criminal prosecution for not being properly insured as a landlord.
2. Don’t be tempted to under-insure – if you do you might save a few pounds on your landlord's insurance quote but if disaster strikes you could be out of pocket by tens of thousands of pounds. It simply isn’t worth it!
3. Check the level of your landlord insurance excess. This is the amount of the claim that you are required to pay. It effectively controls the viability of small claims. The larger the level of excess generally the cheaper the landlord insurance policy. However, landlords should avoid going for too high an excess on their landlord insurance as this will effectively preclude making a claim for many of the small more numerous items on their Landlord Insurance policy. An excess of around £100 is ideal.
4. Most landlord insurance companies automatically index-link your policy to make sure that your reinstatement value is maintained in subsequent years. It is worth checking this when you take the landlord insurance policy out.
5. An injury claim from your tenant, visitor or member of the public is potentially the most serious event that could befall a property owner. You therefore need to ensure that you have adequate landlord insurance cover, for example an incident involving carbon monoxide poisoning.
What does my landlord insurance actually cover?
Landlord property insurance has two elements to it. The bulk of any premium relates to insuring the structure of the building. Many landlords let property part-furnished; that is to say with floor coverings, curtains/blinds, fixtures and fittings and “white goods” in the kitchen.
Most landlord insurance policies include items such as: carpets, laminate flooring, kitchens, bathrooms, white goods, light fittings and curtains. It is always worth checking that this is the case, otherwise it may be necessary to take out additional landlord insurance cover for the contents. This needs to be factored into the overall landlord insurance cost when comparing prices. Items such as furniture are not classed as fixtures and fittings and will need separate cover . Landlord insurance policies will normally replace items on a ‘new for old’ basis.
It is worth noting that there is normally a clause in the landlord insurance policy in which states that a loss will only be covered if there has been ‘forcible or violent entry or exit’. Therefore a landlord insurance policy will only protect you against damage by the tenants and not property theft. This is why having an adequate tenancy deposit is vital.
Finally, check that the landlord insurance policy has some provision for cover against accidental breakage of sanitary fittings and fixed glass such as windows as these are one of the most common areas of damage.
How much should I insure my rental property for?
The level of landlord insurance buildings cover that you need will depends on the rebuilding cost of your rental property. It’s possible to carry out a pretty accurate estimation of this using the Building Cost Information Service (BCIS), part of the RICS. This calculator takes account of the area that the building is in, the type of property and its’ construction and will then generate a reinstatement value on which to base the level of landlord insurance you require.
At Oakland Insurance Services we have a panel of leading landlord and let property insurers ensuring the when you speak to one of our let property insurance experts you are accessing the widest possible market for let property insurance.
All Oakland Insurance specialists provide friendly and expert advice on every aspect of landlord and let property insurance.
We can offer policies to cover a single residential buy to let property to commercial property and large portfolios
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