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What is covered by landlords insurance?

What is covered by landlords insurance?
15 August 2013

By UKinsuranceNET In Landlord Advice

This is a question that may not just have one simple answer.

That’s because there are a great many different types of landlord, property and tenant and each combination may require an insurance policy that is specifically tailored to its possibly unique set of requirements.

At UKinsuranceNET we are very aware of this, which is why we don’t offer a one policy fits all approach. We prefer to work with our clients to ensure that they have the cover that is most appropriate for their situation rather than asking them to make do with something that may not be a particularly good fit for their actual requirements.

There are, of course, some broad categories of cover that may be common to all landlords insurance and an important point to note at the outset is that owner-occupier insurance in not appropriate in circumstances where there are tenants involved.

Damage cover

Protecting yourself financially from the effects of accidental damage to your property is probably one of the main reasons you wish to buy landlords insurance.

Different policies may offer different levels of cover as standard and you may also find that levels of excess might also vary considerably from policy to policy.

Comparing policies on price alone may not tell you very much about how well your interests and your business are covered.

Third Party cover

If your tenant or one of their visitors trips over a loose floorboard, for example, that you should have fixed then they may sue you for any damages or injuries that they suffer as a result.

Court awarded settlements may be astronomically high and you’ll typically find that landlord’s policies may need to provide at least £2m cover though, some may offer more.

Vacant periods

Having 100% occupancy of your property may be one of the most common aims of many landlords but it may not be the most achievable one.

By their very nature, tenants move on and gaps between tenancies may be lengthy. You might experience difficulties finding new tenants or you may be taking the opportunity to have some refurbishment work done.

The trouble is that some policies might typically lapse if the period your property is vacant extends beyond 30 days and you would have to be looking for unoccupied property insurance if you wished your cover to continue. There are other policies though which can provide cover for you for up to 45 or even, in certain circumstances, 90 days, which might provide the breathing space you need to get your new tenants in place.

Types of tenant

Some policies may have very strict conditions relating to the type of tenants that you can have in your property with some, for example, being limited to employed tenants only.

You may find that this is too restrictive for your target market segment and may prefer a policy which provides cover for a wider range of tenant types including, retired people, students, recipients of disability allowances etc.

This is an important area and one it would pay not to overlook.

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