If you are either considering setting up some form of property letting business or alternatively, are a relatively new landlord, you may be wondering just what risks landlords' policies cover.
For an in-depth discussion as to the specifics of an individual policy offering landlords' insurance, it might be advisable to speak to a specialist provider such as UKinsuranceNET.
However, by way of a quick introduction, the following points might be worth reading through:
- the first important principle to grasp is that a standard owner-occupier insurance policy won't be of any use to you in terms of providing building and contents protection;
- typically, such policies become invalid the moment you start obtaining any form of rental income from your property or any part of it;
- the explanation for that is simple - the risks you face as a landlord are significantly different, in certain areas, to those faced by an owner-occupier;
- that is why specialised landlords' policies exist though much of the cover they provide may be broadly familiar to you;
- anyone who owns property would be well advised to make sure that it is adequately insured. In fact, that may be a requirement of any buy-to-let mortgage you have in place. So, buildings cover is typically provided by such policies;
- if you are letting your property on a furnished basis, it might be prudent to be very clear about the value of your contents and to cover them with appropriate insurance. Contents cover may or may not be included in a landlords' policy, depending upon your requirements;
- public liability is a significant exposure for anyone letting property and as a result, it might be included in a typical policy of this type;
- remember though that the maximum cover levels may vary by quite a considerable amount between policies. Given the size that potential court awards might be in the event you were successfully sued by a tenant for damages, it would be a good idea to make sure that you have an adequate financial ceiling on your cover;
- some policies might provide additional elements of cover that are particularly attractive to landlords. Examples might include things such as a loss of rental income if you are forced to ask your tenants to move out to make repairs, cover for malicious damage caused by tenants and trace and access cover.
There is typically no one-size-fits-all solution to the provision of insurance for landlords. As a result, there may be substantial areas of variation between policy providers and that is why it is important to look around carefully prior to purchase.
To give just one illustration, not all buildings cover will necessarily automatically include subsidence as a risk. That is something that it might be advisable to be aware of in advance rather than if you are ever forced into making a claim, only to find that cover for the risk isn't included!