Buy to let cover

Regarding the structure of the building, most insurers typically cover all or some of the following risks, though do note that policy features and benefits can vary depending on the let property insurance provider:

• damage from storms;
• fire;
• damage from vandalism; and
• flood damage.

Some insurers may also cover other risks, like accidental damage and damage caused by tenants (malicious or otherwise). If these benefits are offered by the insurer then these risks can sometimes be covered as optional extras, for which an additional charge can be made.

Loss of rental income due to an insured risk

Should the worst happen and you find that your property is damaged by an insured risk, you might also suffer from a loss of rent. For instance, if your buy to let property is partially destroyed due to a fire, your tenants will have to find alternative accommodation and you will lose your income from the property.
In these circumstances some buy to let home insurance policies may typically cover this lost rent, up to set limits.

On the other hand, loss of rent arising from tenants’ default or disappearing without notice will rarely be included in buildings insurance for landlords.

The price

When you have gathered some quotes, is there a way to reduce the price of the policies that insurers have offered you? It is always worth asking if an insurer offers the following:

• no claims discount related to previous policies;
• a competitive price for combining together the insurance for your other buy to let properties into a single portfolio policy;
• a discount for fitting the latest security features like window locks and burglar alarms; or
• a lower price for having a higher excess (the excess is the first part of a claim that you are liable for)..

If the prices and the cover offered by several buildings insurance for landlords policies are more or less the same, differentiate on the basis of the level of service an insurer offers. Are they easily contactable via the telephone, for example? Remember that professionalism and efficiency may be worth a lot when you need to ring an insurer in a crisis!

Why?

Your property is by definition commercial and becomes so the instant that the contract is finalised and you’re the proud owner. The risk profile for your new acquisition is different to that of a property purchased by an owner-occupier and this is so even if you plan to live in part of the property and rent other parts of it out.

For a start, you’ll have tenants. The majority of tenants are responsible individuals but unfortunately you won’t be able to guarantee that’ll always be the case. Your property is therefore at risk from things such as wilful vandalism and theft of contents.

Another significant difference is that your property will probably stand empty for sometimes extended periods while you’re waiting for new tenants or it’s undergoing redecoration etc. Sadly, in such situations it is more vulnerable to a whole range of problems including unlawful entry, vandalism and theft etc.

It’s also the case that unoccupied properties may suffer problems simply because there is nobody present to spot a problem before it creates a mini-disaster. A leaking water cistern might be one such example.

So for all these reasons, specialised buy to let property insurance is usually highly advisable for a landlord. It’s also worth keeping in mind that standard home buildings and contents insurance will typically not be valid for rented-out properties.

It’s a fact that insurance can, at times, be a little complicated. It’s not always easy to compare different forms of landlord insurance to find the most appropriate cover and price and taking the cheapest may not always give you quite the cover you hoped for.

That’s where we can help with our experience and knowledge of the marketplace.

We are available via email, and on the telephone, and can outline various options and propositions to you so as to simplify the whole process and help you find the buy to let property insurance that’s suitable for your particular circumstances.

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).

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

The early indications are that this will be a very good decision for us as the enquiries are not only coming in but are also being converted into sales and at the end of the day that is important – we are also attracting the right sort of consumers for our product offering which is equally as important.

Our small team will be able to look after these new consumers with a service that will hopefully be more friendly and personal than some of our competition.

Time will tell!

Richard

It appears that not only us mere mortals are involved in the landlords insurance market but we are also joined by the great and the good from the world of showbusiness, although it may cost a bit more! Ever wondered what it might be like to stay at Sir Richard Branson’s let property, or perhaps even Rolling Stone Mick Jagger? Well it appears that the economic climate has encouraged these and other stars to jump on the bandwagon, and who knows who does their landlords insurance or what their premiums are like. Of course the risk is very much different, as landlords insurance will look at the potential for claims during wild parties and such like, with footballers and their WAGS involved in lettings. Some Landlords actually prefer footballers as todays modern players are much more disciplined and the Club’s are very anti parties etc. Still as we say in insurance, their is a market for everything!

Mike

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

Our prices are very competitive and if we could offer quotations on the aggregation sites then consumers would be treated more fairly as they would see the best price and cover which was available rather than having to click through a whole list of providers and then get individual quotations off of each of their sites – a total waste of time.

So the answer is simple – please can the aggregators wake up or can the public stop using them for these niche products where they are simply not adding any value.

Rant over.

Richard

Thanks Mike

I am going to write about arson today. In a recession, we always see an increase in fire claims. These are truly a nightmare for all parties as they are never simple, and the loss is always large. Since November last year I have seen 4 £250,000 plus fire claims so believe me when I say the risk is real. All of these have been on properties that are unoccupied and unfortunately we are seeing longer periods of vacancy between lets.

So, is there anything you can do?

Here are my suggestions:

1 ASSESS THE RISK

Identify how susceptible the property is to arson.  Is it on a corner plot?  Is there an alleyway beside it?  Are there any existing security measures?
Look for potential hazards for example is there any combustible waste next to the property?
Is the property empty?  Are there other empty properties nearby?

Record your findings and consider them.

2. MAKE SURE PHYSICAL SECURITY IS ADEQUATE

The more difficult or awkward it is for an intruder to cause damage to your property the better.  You want your property to be less of a target than another property in the same neighbourhood.  So what can you do?

Fences should be in a good condition and difficult to climb.  Simple things like trellis at the top will put people off climbing over as it will not withstand someones weight.

Any doors should have mortice locks or equivalent and when the property is empty these should be in use.  You need to record where the keys are and who has them.  When a tenant leaves make sure you get them back.  Your property is of greater value than your car and you would not let anyone have those!  If you cannot account for a set of keys, change the locks.  It may be costly but nowhere near as costly as a fire.

If the property is on a corner plot, next to an alley, or otherwise exposed,  put motion sensor lights in to make it as obvious as possible if someone is trying to break in.

If the property is empty make sure that you or someone you trust checks it weekly and records the fact.  If the worst does happen, any evidence you can provide to insurers of good practice will help make the process quick and painless.

3. COMBUSTIBLES

It may seem obvious but make sure that there are not piles of waste or rubbish next to the property.  Where possible these should be kept away from the property or removed.  Skips should be as far from the property as possible but also away from fences and walls.  Vegetation which acts as cover should be cut short and the cuttings removed.

KEY ACTION STEPS:

1 Take responsibility and be vigilant

2 Carry out a risk assessment and record the findings.  Update this regularly

3 Review the fire precautions you have

4 Control visitors, customer and contractors.

If you need more help or advice, visit the arson prevention bureau for help and guidance.  This is an increasing risk in recession.  Whilst we will help you with the problem if it happens, it is better to try and avoid it.

I sound a bit like a crusader here, but I have too much first hand experience of the real issues caused to sound anything less.

All the best

Nick