So if your property suffers damage as a result of a storm, fire, flood etc, (known as ‘perils’ in insurance speak) then buildings insurance for landlords may typically provide help with the costs of repairing that damage.

Loss of income

The rental of your property may make an important contribution to your level of income. Getting repairs done as quickly as possible may be of paramount importance to you, particularly if you are losing rental income while these are being carried out.

Getting specialist advice on the right level of landlords insurance cover may mean that if you do have to make a claim, insurance related matters can be easily and quickly sorted out so that work can start as soon as possible.

You may even find that some buildings insurance cover for landlords may be able to contribute towards loss of rental income if your tenants have to move out of your property as a result of damage caused by an insured event.

Accidental damage

Even putting aside the idea that tenants may not take as much care around your property as your would yourself, accidents can and all to frequently do happen.

Repairing this type of damage is possible source of expense you may be able to avoid if you have building insurance for landlords cover in place.

It’s your property but not your home

It may also be worth bearing in mind that however tempted you may be to try and economise on landlords insurance by using a homeowner’s building and contents insurance policy, this may turn out to be a false economy.

In the event that you had to make a claim, you may find that your policy was simply invalid. In addition, you may also find it extremely difficult to buy insurance in the future.

Buildings insurance for landlords may typically provide the right mix of cover essential to give you peace of mind protection for your assets and your livelihood. It may not be sensible to risk trying to do without it.

It differs from a normal owner-occupier buildings and contents insurance policy in two important respects:

• it recognises that you have tenants in your property and that this adds risk;
• it needs to deal with the possibility that your house will stand unoccupied for periods of time for redecoration or between lettings etc (if this is more than 30 days, you may require specific unoccupied property insurance protection).

That’s why you can’t just make do with owner-occupier insurance. Yes, it perhaps is slightly cheaper than the typical landlord building insurance policy but it will become invalid the moment you start renting a property out.

Although the majority of tenants are perfectly respectable people who would never dream of causing you any trouble, unfortunately the reality is that they still may never take quite as good care of your property as would you as the owner.

Accidents and associated damage may be more prevalent and tenants may not be quite as inclined to notice problems that may cause cumulative troubles (e.g. a leaky tap) as you would yourself.

Then there are those risks arising from the tenants (and their guests) as people on your property.

If any of them are injured on your property, and this is held to be as a result of your property itself, then you may find that you’re on the receiving end of a claim for compensation. The sums awarded against you may be literally ruinously high unless you have the support of landlords’ public liability cover to help.

In the case of unoccupied property, the position with landlord building insurance may be a little more complicated.

Policies typically recognise that your property may be unoccupied from time to time – and perhaps more than many owner-occupied properties.

If that’s for a week’s re-decoration here or a fortnight between lettings there, then that is unlikely to be a problem in terms of insurance cover. There are additional risks arising from that but that will have been factored into the policy premium.

However, if your property is going to be unoccupied for more than 30 days, it may be advisable to check the implications with the insurance provider and have some form of vacant property insurance put in place.

As the risks for properties that stand unoccupied for longer periods are typically greater, insurance companies may expect to make a special provision through the unoccupied property cover mentioned above.

Landlord building insurance could help insulate you from the worst financial effects of a property-based problem. Thinking about it a little more may be a good idea.

Relying on luck

If we were being honest with ourselves, perhaps many of us would admit that we’ve sometimes skimped on one form of insurance or another to try and save money.

Yet as a landlord, your property is your business. Not protecting it may not only put at risk a major asset but also your income.

It is true that a buy to let property or any other form of rental building is not necessarily more at risk than others in some respects but it may suffer from risks of a type that are not applicable to an owner-occupied property.

So, for example, an owner-occupier is typically exceptionally unlikely to go out of their way to deliberately damage their own property. This may not be the case with some tenants.

It’s also the case that a rental property may stand empty more frequently than other types of residential property – if you’re waiting for new tenants or carrying out renovations for example and unoccupied properties are more exposed to a whole variety of risks than those with people living in them.

That’s why as a landlord you are really faced with only two options – relying on luck alone or purchasing a policy providing buildings insurance for landlords.

Other considerations

Your rental property isn’t only at risk in terms of its bricks and mortar. It may have contents, fixtures and fittings. All these are also typically at risk from the usual variety of causes plus those that arise from having tenants in your property.

That’s why some buildings insurance for landlords also typically includes protection in these areas and therefore is effectively a building and contents insurance policy.

It’s also perhaps worth keeping in mind that the typical owner-occupier buildings and contents insurance will not provide you with cover for rental properties. Although it may be tempting to try and save some relatively small amounts of money by using owner-occupier buildings and contents policies, in a crisis and claim situation such policies may prove to be completely invalid.

Building and contents insurance quote for landlords

There are specialist providers of this type of buy to let insurance policy. Having the right buildings insurance for landlords cover in place may provide you with the confidence that your business interests are protected

Worried about nothing

If you’re responsible for obtaining income from property you own by renting it (or part of it) out, then you’re part of the fraternity of landlords!

That brings with it both the enjoyable aspects of earning income from buy to let or other forms of rental properties, but also worries and risks.

No property is invulnerable. Natural disasters and accidents can happen at any time. If you’re not insured, you’re either going to have to find money to restore the property yourself or see your asset diminish rapidly in value.

In the case of rented properties, as a landlord you also have all the risks that come with the territory of having tenants aboard.

The vast majority of tenants are responsible and trustworthy people, but even so, they can have accidents that result in damage to your property or its contents. That’s to say nothing of accidents that damage the tenants themselves and that they may hold you accountable for.

Then there are those few tenants that are not responsible individuals and who decide to vent their unhappiness with life on your property before leaving it.

So, all things said, you have cause to be concerned!

Insurance

Buy to let insurance can’t stop any of these things happening. What it can typically do is to make sure that you have financial backup to help you restore your property and contents should any of these things come to pass.

However, not all insurance will meet the requirements. Normal owner-occupier buildings and contents policies typically won’t cover rental properties – not something you’ll want to discover for the first time when you need help via a claim!

There are specific landlord building insurance policies designed to cover most of these circumstances.

The life of a landlord isn’t an easy one. If you’re looking for a little more peace of mind and a little less worry, then researching buy to let landlord building insurance may be a good investment of your time.

If, for example, you were looking for a buildings and contents insurance quote, why would the insurance company typically quote more for a rented out property than they would for an owner-occupied one?

Rented properties – they are different

Buildings insurance for landlords needs to take into account that your building or property suffers from increased risk. This typically arises because, unlike an owner-occupied property, a rented building:

• may stand empty more frequently and for longer durations during renovations and re-decorations – typically properties are more at risk when empty;
• have tenants that do not exercise appropriate care of the property or behave responsibly and promptly if there is a problem (such as storm damage or leaks etc);
• have tenants that maliciously and wilfully damage it.

In all these areas, there is no real equivalent risk for an owner-occupier.

For these reasons, standard building and contents insurance will typically not cover a property that is being rented out – whether in totality or part. Specialist commercial buildings insurance for landlords is required.

As the price of insurance is to some extent based upon the insurance companies’ perceptions of risk, insurance for rental or buy to let properties is typically a little higher in price than standard cover.

When is a property a rental property?

The exact definitions here may vary slightly among insurance companies but in general terms, the moment you offer your property or part of your property for rental, you have become a landlord and a commercial business.

This may not only change the way you need to think about buildings insurance for landlords but other aspects of your insurance cover as well.

For example, as a landlord you may have additional risks of being on the receiving end of a claim for damages due to an accident on or around your property involving tenants or their guests. This may mean that you need a buy to let landlord policy that provides enhanced third party liability cover.

You may also need to give some consideration to your contents if your property is let fully or partly furnished. The risks of accidental or wilful destruction or even theft from tenants is real.

It may also be worth keeping in mind that as a landlord, you may have responsibilities towards individuals on your premises that may, in, some cases, be considered legally to be a form of employee.

As an example, if you’re asking a cleaning company to do work for you on your commercial property and as a result they suffer an accident or injury, you may be held liable under law for any claims arising. This may apply even if no formal contract of employment or work exists between you.

Employers’ liability insurance is typically required to cover that form of risk but it is not usually included in standard buy to let landlord insurance.

So, if you have found yourself, either through design or accident, suddenly in the role of a commercial renter, taking some time to research the implications for buildings insurance for landlords may be a sound investment.

Why is landlords’ insurance necessary?

If you use your property, or part of your property, for rental purposes then both legally and in terms of insurance, your property is a business. Your interests are commercial, you are gaining income from the property and you have responsibilities and obligations arising from both of those things.

This reality affects your risk profile and therefore how an insurance company will view your property.

For example, you may have:

• the usual risks associated with owning a property, such as natural disasters (storm or flood damage, for example):
• a property that is particularly vulnerable to problems due to vandalism or break-ins, while it is unoccupied for periods in-between lettings;
• claims against you for injuries suffered by tenants or guests while on your premises.

A standard home building and contents insurance policy is not suitable – nor valid – for a buy to let property. That’s why specialised buildings insurance for landlords is typically highly advisable.

What’s wrong with ordinary household insurance?

Nothing at all – providing you are talking about an owner-occupied property!

If your property is commercial, you could only obtain ordinary buildings and contents cover by making a false declaration, followed up by a claim under false circumstances should a problem subsequently arise. This may have serious legal and insurance related consequences and it is not a good idea.

If you already have owner-occupier cover and then start renting out the property (or even a part of it) you may find that your insurance immediately becomes invalid. Typically this may even apply to very short-term summer lets.

What about employees and service companies?

If you have employees that clean and service your properties or that act as caretakers, in some situations the law may demand that you are covered by employers’ liability insurance. This is typically not included in standard buildings insurance for landlords’ policies.

The position with respect to painters, decorators or service companies, may be a little more complicated. Even if they have their own company insurance, you may still have liabilities for their safety while on your property under public liability legislation. It may be worth ensuring that you would be covered for accidents they may have while working for you etc.

Having appropriate buildings insurance for landlords could make the difference between something being a problem for you or a financial disaster.

The flood damage costs are estimated to be an astonishing £100million. With this event devastating homes and businesses in Cumbria and Scotland, how will they return to normality?

Unfortunately, events like this tend to attract the “cowboys” of the building, electrical and plumbing industry. In most cases, good tradesmen are busy tradesmen and some may not travel to a disaster like this, as they feel they should not profit from other peoples misery. So who can these people look to for respectable and honest business?

Insurers can offer an alternative with their own contractors, which could be an easier option. However, some may feel more comfortable using a tradesperson they have dealt with previously. Either way, the work needs to be carried out and hopefully it is completed appropriately.

Sam

Cover4 Account Handler

With the new year just ahead of us, we have many opportunities for us to expand and develop. At present, a new product is progressing and will hopefully be unveiled at some point next year! With this maturing and our renewals growing rapidly, the team must prepare and perhaps expand which makes for a very event filled new year. I’m certain we will thrive with these changes and tackle new challenges with a positive attitude.

Sam

Cover4 Account Handler

This particular subject matter is very contentious, in fact we deal wih over 10 insurers for let property and some of our panel will honour the claim and some will not.

Why?

The reasons vary based upon the individual insurers contract and their own experiences, but cannabis factories is a relatively new problem and these cases are still being tested in the courts, if your property was damaged by fire from the heating used to cultivate your tenants cannabis farm how would you feel?

What I would like to know from you is: -

Did you have any idea this eventuality may not be covered?

Would you expect this eventuality to be covered?

Should the property not have been visited by you or your manageing agent?

Subject to your feedback we will get on and do something about it.

Richard

The economic downturn does not mean that opportunities for investment are drying up. On the contrary, those fortunate enough to be in a cash rich situation are ideally placed to act on opportunities actually created by the credit crunch. There are more properties lying vacant, more properties repossessed but very few who are in a position to invest without incurring a disproportionate financial risk to the investment.

One such opportunity lies in Milton Keynes, soon to welcome Network Rail to the area bringing with them 3000 staff. Opportunities for development around the area for the trained eye will be very good and if purchased at the correct time will be ideally placed to capitalise fully when the market conditions take a turn for the better.