Landlord Property Insurance

Landlord property insurance

Although many landlords have never experienced a problem with their property, it’s not unusual to find others with horror stories to tell. These may be of the type that any owner-occupier would be familiar with such as fire, flood, subsidence, storm damage etc. Landlords though also experience problems because of the nature of their business such as theft or malicious damage by tenants; damage to the property due to neglect; vandalism of properties empty between lets; and tenants vanishing with large unpaid rent arrears. This is why landlord property insurance is so important.

If you’re a professional and ethical landlord, you probably take your occupation and role seriously. There are certain things you need to run your business efficiently and correctly and would not consider doing without. If you’re not already doing so, it may be advisable to add professional landlord property insurance to that list.

Why? Your activity is specialised and commercial. It doesn’t matter whether the property is a flat in a large block, a detached house only let for holidays 6 weeks per year or a large factory – once you charge someone rent to use it your activities are by definition commercial and this changes the nature of your insurance needs.

Getting the right cover

That’s because of the fundamental difference in the risks you are exposed to as a landlord (as outlined above). Insurance companies need to know this and ensure that you have the right policy in place to fully protect your interests. In the event of a problem resulting in claim, if you have an inappropriate or inadequate policy the insurance company could reject it leaving you to foot the bill from your own personal finances. This could easily be a financial catastrophe for any landlord.

These circumstances can particularly arise with landlords who are attempting to use their personal owner-occupier insurance to cover a property they have in fact rented out. Owner-occupier insurance will in reality never cover a property or contents that have been rented out. Trying to obtain insurance cover by making a false declaration of usage is not advisable and could result in you finding it difficult to obtain any insurance in future. Making a claim supported by false declarations of use constitutes fraud and can be a matter of prosecution under the law.

Misusing insurance is not only unwise but also unnecessary. There are many specialist providers of landlord related insurance products. These policies can cover buildings and content risks including circumstances where the property is empty and between lettings or empty while under renovation and refurbishment. Tenant risks can be covered including situations where they have left suddenly and you have suffered a loss of unpaid rent arrears etc. In general, the price difference between landlord property insurance and that for the owner-occupied may be less than you think. It may be worth investigating this further.