Let property insurance – a special case
A special case might need to be made for let property insurance because it is important to get it right. It is likely to prove very short-sighted, for example, simply to ignore the fact that a home is going to be let to tenants in the optimistic belief that a standard home insurance policy will cover all the risks. Any such insurer certainly needs to be informed that the property is about to be let. Even then, most insurers will decline to maintain the home building and contents insurance cover or to reduce the level of cover for so long as it is being let.
Arranging insurance specifically designed for rental property meets the need for you to know just where you stand. It is likely to give you the reassurance that the let premises are as well protected – or even better protected – than your own residence. The principles are familiar enough to any home owner with standard building and contents insurance, yet subtly different to reflect the particular risks of property that is generally let out to tenants.
Building and contents insurance
This is very similar to the cover you are likely to have for your own home and typically protects the fabric of the building and its contents against the principal – and potentially catastrophic – disasters such as fire, flood, and storm damage.
Without it, of course, you might be faced with an extremely expensive bill for extensively repairing – or worse still even rebuilding – the property.
Landlords’ contents insurance might need to be less extensive than the cover on your own home, since tenants are responsible for choosing whether or not to insure their own possessions. However, you might want to check whether any fixtures, fittings or furniture that you have installed are included in this element of insurance for buy to let property.
Public liability insurance
Once again, your standard home insurance frequently includes an element of cover against third party claims from members of the public (in the event of a loose slate on your roof sliding off and injuring a passerby or damaging their parked car, for instance).
In the case of let property insurance, however, landlords typically seek additional protection from the risk of a tenant injuring him or herself as a result of some defect in the rented property or in the event of damage to their possessions as a result of the landlord’s perceived negligence.
Loss of rental income
If the worst happens and the let property suffers damage that renders it no longer habitable and which is covered under your buy to let insurance policy, you might be able to rely on the building insurance cover to help pay for the necessary repairs, but you stand to lose the rental income otherwise earned. Some let property insurance policies typically include cover against any loss of rental income in such circumstances (normally up to a previously agreed maximum).
Tags: let property insurance