Landlord building insurance – safeguarding your assets
In insurance speak, the risks covered by landlord building insurance are known as perils. These perils fall into two main categories.
There are natural disaster type perils, which include damage from events like flood, fire and smoke, weather or storm damage and earthquake. Building insurance also may cover the secondary effects of many of these perils. So, for example, very cold weather may cause pipes to freeze and then burst causing damage when the thaw sets in.
Other perils may be of a more man made kind and may include riot, theft and possibly malicious damage.
Landlord building insurance cover can help you manage the effects of damage caused by these perils (though it is important to note that policy features and benefits do vary among providers and some may not offer all of the elements mentioned above – for example, not every buy to let insurance policy will cover malicious damage).
Contents cover
Unfortunately not all your tenants are going to be as careful and responsible with your property as they would be with their own. Buy to let building insurance on its own will typically not cover damage, either accidental or malicious, to your soft furnishings and fittings. For this type of cover you may need to take out buy to let contents insurance too.
Owners’ liability cover
Keeping your property in a state of good repair is typically one of the conditions of many landlord building insurance policies. There are good safety reasons for this.
If someone is somehow injured while in or around your property as a result of being hit by a falling slate for example or tripping over a loose carpet then if it can be shown to be as a result of poor maintenance on your part then they sue you for damages. Having a good level of public liability insurance may be a sensible step towards protecting yourself from large financial awards made against you.
Loss of rent
A good landlords insurance policy may also provide cover for loss of rent due to it being made uninhabitable as a result of an insured event. It may be worth noting though that this typically will not cover loss of rent if your tenant absconds, leaving rent arrears behind.
Unoccupied property
If your property is unoccupied, perhaps while you are waiting for new tenants to move in or if the building is undergoing renovation, then the situation with regard to commercial building insurance may change slightly. This is because the risks of something happening to your property are higher if it is empty.
For example, your property may be more of a target for thieves and vandals if it is unoccupied. Water damage from things like missing slates, broken windows or burst pipes may go undetected because no one is around and the consequential damage may cost a lot of money to repair.
It may be a sensible step to let your insurance provider know if your property is going to be empty for extended periods of time so that they can advise on what additional landlord building insurance may be appropriate in your circumstances, such as empty property cover.