Buy to Let Buildings Insurance

Buy to let buildings insurance

If you are thinking about buying a property to let on a residential or commercial basis, then you may need to carefully consider what type of buy to let buildings insurance you may need to adequately protect your business interests and your newly acquired asset.

As with normal owner-occupied home insurance, it may be sensible for the building itself to be insured against risks such as damage from fire, flood or lightning strikes. This perhaps should also cover against it having to be completely rebuilt as a result of a major catastrophe.

As a general rule of thumb, the higher the value of the property, the higher the premium will be. The property value figure that the insurers need in these cases is the cost of rebuilding the property from scratch and not the market value. You may need specialist help to get a realistic figure.

An important point to note here is that it may be tempting to try and save a bit on your premiums by underestimating the value of the property. In the event of a disaster, this could be a very false economy indeed. The policy would only pay out to the value insured and you could be looking at a significant shortfall, particularly if faced with having to pay for a complete rebuild.

Fittings and fixtures are generally included in buy to let buildings insurance policies but if you are leaving some of your own property on the premises then you may want to consider taking out some contents insurance as well.  This could cover items like white goods, floor coverings etc that you may leave in your property for the use of your tenants.

Accidental damage

You may need to bear in mind that your tenants probably won't take as much care with your property as they would with their own. Some may even cause damage maliciously but even with the best tenants in the world, accidents can and do happen. 

As the owner of a buy to let building you may also be liable for injuries that your tenants or someone visiting your property may sustain either as a result of some fault or defect or from an accident like a slate falling off the roof and causing injury. In addition to ensuring that your premises are as safe as possible, you may also find it worthwhile to take out some landlords liability insurance to ensure that in the event that someone is injured on your property you don't end up facing a potentially crippling claim for damages. 

Getting the right type and level of insurance is key if you want to fully protect your asset. Indeed if you hope to take out a mortgage for your purchase then your lender may stipulate that you have appropriate buy to let buildings insurance as a condition of the loan itself.

No one wants to waste money by buying insurance that they don't need but being underinsured or having the wrong type of insurance for your own particular circumstances can be either very dangerous.

Getting some advice from a specialist buy to let buildings insurance provider could be the answer.