Insurance for Buy to Let

Insurance for buy to let

It’s probably true to say that if you’ve hit an expensive problem with your property then the only thing that’s worse than not having insurance is in fact to have insurance that you can’t claim against. Unless you’d like to avoid putting that to the test, you may wish to think about insurance for buy to let properties.

Why does this require a little dedicated thought? There are two main reasons that may or may not apply in your case:

• Some people renting our their properties believe that they can cover their risks through standard owner-occupier insurance;
• Some may believe that their risks are no different to those with their own owner-occupied property..

To assume either of these things could prove to be a very expensive mistake.

Insurance for buy to let is a specialised set of policies aimed at protecting landlords. Whether your property is rented out for commercial or residential purposes, is a single flat, an entire block or even a holiday cottage let infrequently, you will have specialised requirements.

Standard owner occupier insurance cannot cope with these needs and an insurance company will not honour a claim lodged under that type of policy if the property has been rented out. In fact, making such a claim and falsely declaring that the property was not under rental could result in prosecution for attempted fraud and yes, the insurance companies do have ways of checking.

Why can’t standard insurance deal with this type of requirement?

As a professional landlord you will probably want to ensure your major risks are covered by landlord insurance. It is true that some of those risks are broadly similar to those of an owner-occupied property a house is perhaps no more likely to suffer from the loss of its roof in a storm just because it is tenant occupied.

Unfortunately though, there are a significant number of risks that you will encounter as a landlord that would be impossible or much less common for an owner occupier to come up against. That is why insurance for buy to let properties is so important.

Clearly you have risks and exposures to your tenants. These relate to property or contents costs you may incur as a result of their actions or inactions. If they intentionally or otherwise damage your property or fixtures you may find that you have to pay. They may also depart suddenly leaving large rent arrears if the deposit you hold is a lot less than the sum you’re due then it won’t be much consolation.

Then you have your risks and exposures in terms of needing to pay them or their visitors for any injuries they may suffer while on your property.  Courts may be inclined to give renters the benefit of the doubt and attribute accidents to your maintenance. If so, they can award staggeringly large sums in damages.
It isn’t only tenants that make your property different once it is rented out. If it stands empty between rentals or is being cleaned and decorated, it will be more susceptible to vandalism, burglary or damage due to deterioration that you may not spot because you’re not living there.

If you employ a cleaning and maintenance company, you may also be liable for accidents leading to injury to them while they’re on your property.

For all these reasons plus others, the insurance industry categorises rental properties as being higher risk and has therefore defined special policies to try and help.

Insurance for buy to let properties is available through specialist insurance providers, many of whom operate on the Internet. Their sites can offer a wealth of information and options and you may be surprised at the relatively low cost. Yes, such insurance can be more expensive than ordinary household type cover but often not much and the small additional cost may pale into insignificance when compared to the risks you face without it!