Landlord Property Insurance
Property is extremely expensive. So it clearly make sense to make sure that it is properly insured in case the worst happens.
In particular, when choosing insurance it is important to make sure that you are using an insurance product which is specifically designed for landlords.
DON’T use ordinary household insurance. Your insurer needs to know that the property is rented out to tenants or they can refuse to pay out on claims.
There are also additional things you will need to be covered – for example:
- Voids – make sure your insurers will cover you while the property is empty between tenants. Look for a policy which gives you 90 days.
- Malicious damage by tenants – in particular, make sure you are covered in the event that your property is converted to a cannabis farm. This CAN happen to you (and sometimes they just convert one small area, eg the loft) and the cost of putting the damage right can be HORRENDOUS!
- Accidents on the property resulting in injury to the tenants or their children or guests which are deemed to be the Landlord’s responsibility. E.G. poorly fitted carpet which they trip on and break their leg.
- Loss of rent – there are two situations here. (1) Loss of rent due to the property being uninhabitable due to repair work, and (2) loss of rent due to tenant non-payment. This last will require a separate ‘rent guarantee’ insurance and will NOT normally be included in your general landlord’s insurance policy, although it can be added to some, so it’s worth asking about.
Here are some other things to consider:
- Things which are excluded. For example, some policies will exclude cover if the property is let to certain tenant types, eg students or people on benefits, so again, these questions are worth asking
- Fees and charges. Some landlords have a bit of a shock when these are charged to them. Make sure you know exactly what charges will be levied on you and the level of any excess before you sign up!
- The excess (the first part of a claim which is paid for by you). This will vary for different types of claim – for example, there is often a larger excess for subsidence claims (assuming you are covered for this). You need to know what this is.
- The sum insured – finally, make sure you are insured for the correct amount. If you are under-insured, your insurers, even if they pay a claim, may make a substantial reduction to take account of this. This is a common and serious problem.
So, whatever you do, you MUST be insured on your rental property AND you should pay a bit extra to get the fullest possible cover.
If you want have questions about anything to do with letting out residential property, call me on 01799 668 233 or email email@example.com.