When to buy let property insurance
Whether you run a business letting out a property to tenants on a regular basis or whether you intend to let your own home on a one-off basis (while you are working on an overseas contract, for instance) you are likely to need let property insurance.
For the duration of your role as a landlord, there are specific elements of cover not normally included in standard home insurance that help to provide more reliable and comprehensive insurance against the risks of letting your property. Indeed, if it is your own home that you intend to let out, you are almost certainly obliged to notify your mortgage lender, who is likely to insist on adequate let property cover being in place.
If you are letting property, some of the insurance cover elements are likely to be entirely familiar if you are the owner-occupier of your own home. Buildings insurance, for example, represents an indispensable safeguard against major damage to the structure of the building, whether it is the owner’s place of residence or let to tenants.
Similarly, contents insurance comes into its own by protecting against damage or loss of possessions, fixtures, furnishings and fittings within an owner-occupied home or to protect the contents owned by the landlord of a rented property.
Let property insurance offers rather more than this, however. Although details of the actual package are likely to vary from insurer to insurer – especially when it is specifically buy to let insurance that is being sought – just a few examples might help to highlight the way in which this insurance differs from standard homeowner’s insurance:
- Public liability insurance – although some home insurance packages include an element of public liability cover, when a property is being let, it is especially prudent for the landlord to take cover against claims from tenants, members of the public or other visitors who suffer accidental injury or loss or damage to their property. To help guard against the financial impact of such claims, landlord liability cover is typically up to £1million for any one claim;
- Empty property insurance – let property is more than likely to be interspersed with empty property (during the time it takes to advertise, vet and move in new tenants after previous ones have moved out). Clearly, the property is especially vulnerable during times when no one lives there and this element of insurance is designed to cover the increased risk (typically for up to a maximum period of time);
- Loss of rent – natural disasters, accidents and damage caused by an insured peril might all contribute to your losing planned income from the property. Let property insurance typically provides compensation for loss of rental income arising from such situations.
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