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Part and parcel of running a buy to let business is the need for landlord’s insurance.
Why is that so? Why do you need such cover? And what might you need to know when buying it?
Why do you need landlord’s insurance?
There is no law or regulation demanding that you have landlord’s insurance simply to let out the property you own to tenants. (Though as part of your mortgage contract, your lender may demand that you have at the very least adequate buildings insurance to protect both your financial interests).
There are risks and perils which come with the role of landlord which make it an especially prudent course of action.
What are some of those risks?
Landlord liability and property owner’s liability
as the landlord and property owner, you have a number of responsibilities not only to your tenants, but also to their visitors and to members of the general public;
if any one of these suffers an injury or has their property damaged in some way connected with your let property, they may claim your negligence in the duty of care you owe them and sue you for considerable damages;
the risk may be considerable, with landlord liability and property owner’s liability cover typically set at a minimum of £1 million;
you owe a similar duty of care towards anyone you may be employing in your buy to let business;
in the case of employees, however, the law does require that you hold a minimum of £5 million liability cover against their injury, illness or other medical condition contracted as a result of their employment;
Building and contents
the building you let, together with any contents you own, are vulnerable to a number of potentially serious physical threats, leading to extensive and expensive damage;
landlord’s insurance typically has at its core sufficient cover against such loss or damage;
Loss of rental income
the insurance also frequently provides for a degree of compensation for loss of rental income if an insured event renders your let property temporarily unusable by your tenants.
What you need to know when buying cover
Perhaps the most important thing to know when buying insurance for your buy to let business is that you must choose specialist, purpose designed landlord’s insurance – and not rely, for example, on a standard form of home building and contents insurance that might be suitable for an owner occupier of his or her home.
Insurers take the view that a let property is in quite different use to one which is occupied by its owner as his or her main place of residence. Not only is there a difference in use, but the risks and perils faced by the two kinds of dwelling are also quite different.
If you have only an owner occupier’s standard home insurance policy, but are letting the property to tenants, you may find that any claim you make for loss or damage may be rejected by your insurer.
Why choose us?
At UKinsuranceNET we are able to arrange landlord’s insurance for all types of let property – both residential and commercial. Policies are tailored to your needs, yet competitively priced and, if you own a portfolio of a number of let properties, we are able to secure even further discounts on the cost of your premiums.