• you have recognised the importance of protecting your interests through landlord insurance;
• you are already thinking of how you can get suitable cover at an affordable price.

Landlord insurance – to help protect your finances

If you’re an experienced landlord, then you probably don’t need anyone to tell you that it can be a risky business.

By contrast, if you’re considering buy to let insurance and becoming a landlord for the first time, then you may perhaps be at risk of under-estimating the risks you face.

Let’s consider briefly, just a summary of some of the problems you may potentially face:

• accidents happening to tenants or their guests (or even passers-by) that are directly attributable to your property;
• theft of your contents;
• vandalism to your property and/or its contents;
• natural disasters such as fire etc.

This is not a complete list and it may be advisable to ensure that any cheap landlord insurance is capable of dealing with these sorts of things.

The nature of cheap insurance

Times are tough and it’s understandable if you’re looking for the more suitable deals, financially speaking.

Yet a little caution may be advisable when thinking about anything describing itself as cheap landlord insurance.

The problem is that it can be difficult or perhaps even impossible, to define exactly what cheap means.

In one sense, if you find a policy that is lower cost than any other, you may be able to say that you’ve found cheap landlord insurance.

Unfortunately though, that’s only one side of the equation and the other one, such as what cover you’re actually getting for your money, may be equally as important to consider.

An hypothetical example

To illustrate this, consider two landlord insurance policies.

Policy A is cheaper than policy B.

Yet policy A offers contents replacement on a new-for-old basis whereas policy B only provides replacement on a market valuation basis.

If you’re unlucky enough to suffer a fire and need to replace many of your contents, policy A may offer you a far better reimbursement than policy B.

In such circumstances, if you have policy B you may suddenly find that it no longer appears to be even remotely something you consider to be bargain landlord insurance – particularly as you start having to write out some large cheques to replace your contents.

A rational appraisal

There are of course many other such examples but they all indicate the same thing – that any landlord insurance needs to be reviewed against your total requirements before it’s possible to be sure that you have a suitable policy.

What this means is that low cost landlord insurance isn’t something that can be seen in terms of price alone. It may be better to consider what your minimum requirements are, then to try and check those against policies that can deliver against them.

Once you have that information to hand, only then is it perhaps advisable to move onto looking at the policy prices to make some form of comparison between them.

So, before diving in headfirst into that policy advertised as cheap landlord insurance, make sure you know what you’re looking for and that the policy will give it to you!

Landlord building insurance can offer the standard protection against the perils of things like flood, earthquake, fire and storm etc, as well as providing financial cover if your property needs to be rebuilt following a major incident.

On the rebuild subject, it may be worth bearing in mind that the amount of cover you might need should reflect how much it would cost to rebuild your property should the worst happen.

This may be a completely different figure to what your property may have cost you to buy.

Having a professional survey carried out may be one way of getting an accurate figure to base your insurance cover around.

A bit more

Building insurance for landlords may also go a bit further than that and provide additional features of cover, either as standard or optional extras, which could be vital to helping you maintain your livelihood.

For example, tenants may be one of the main risks for a buy to let landlord and typical standard landlord insurance may not offer much cover for loss of rent due to tenants who abscond leaving rent arrears.

However, if your property is made uninhabitable as a result of damage due to an insured event though, with some providers, such as ourselves, your landlord building insurance may provide some cover for loss of rent until repairs have been carried out and your tenants can move back in.

Liability cover

Public liability insurance is potentially another important part of landlord building insurance.

If one of your tenants or even a member of the general public is injured by a piece of guttering falling from the roof of your property, then they may decide to sue you if there could be a case made that this was somehow due to some negligence on your part.

In addition to paying out damages if the case is found against you, you may also be liable for legal costs whatever the result of the claim.

Empty properties

Remember as well that if your property is empty for a period of 30 days or more, then your landlords building insurance may not provide the cover you expect.

You may have to supplement your cover with insurance specifically targeted at empty properties, often called vacant property insurance or unoccupied property insurance. This is because your property may be more at risk when it is empty than it is when you have tenants. For example:

• unoccupied properties may be more of a target for vandals or thieves;
• a small easily fixed leaking pipe may become a much more expensive to fix problem if left unattended and additional damage results.

Landlord building insurance provides levels of cover that standard owner-occupier home building and contents insurance doesn’t. So if you are tempted to make do with what might typically be the slightly cheaper owner occupier option you may be in for an unpleasant surprise if you have to claim and find that your insurance is invalid.

Letting and owner-occupier occupier policies

Just as the insurance requirements for private and commercial vehicles differs, so does that for commercial versus residential properties.

It’s also worth noting that in this context, the term commercial property here means property that you obtain income from. It does not mean a shop or warehouse.

The moment that you earn income through renting out all or even a part of your property – and even if on a short-term basis – then you have a commercial renting business and you’re a landlord.

That means it would be prudent to start thinking about letting property insurance (also known as landlord insurance).

The dangers of not doing so

If you apply for vehicle insurance and intentionally mis-describe your vehicle, then in the event of a claim you may expect your policy to be invalidated, the claim refused and possibly to be at risk of being asked to account for your actions.

The same thing applies to landlords insurance.

Typically there is no way that you can somehow make do with owner-occupier home buildings and contents cover and still expect to have claims honoured.

Not only that, but trying to make a claim for a rented-out property on an owner-occupied policy may leave you liable for various forms of further action and make it difficult for you to obtain insurance in future.

Remember the tenants

One area that is worthy of particular consideration is that of your tenants.

Once you have tenants in your property and they in turn have visitors etc, your liability risks increase.

It only takes somebody to have a split-second accident that is attributable to your property and you may find yourself staring into the face of a public liability claim.

Having insurance that protects you against the financial implications of such claims is another reason why having specialised landlords insurance may be important.

The responsible landlord

As a landlord, you may think that it makes sense to have insurance to protect:

• your financial interests and
• potentially those of your tenants.

Finding an appropriate form of letting property insurance might be exactly the way to achieve that.

Of course that sometimes can be something of a challenge. Most landlords stipulate that tenants must keep the property clean and well maintained but let’s be blunt – not all tenants necessarily see this as one of their top priorities.

That’s why many landlords reluctantly accept that either they or their cleaners are going to have to roll-up their sleeves and get stuck in once a letting is concluded.

Yet one area that’s sometimes overlooked by tenants, landlords and cleaners, is the oven.

Ovens can be unsavoury

If you’ve ever opened up an oven and found the walls and grill covered in old congealed oil and fat – then you’ll know how unpleasant that can be.

OK, it may not in itself stop someone renting your property if it is otherwise perfect for their needs but it may well influence negatively some renters if they’re hovering between a yes or no.

It may suggest that there are other nasties lurking in hidden corners!

Dirty ovens can be dangerous!

It’s also a fact that ovens, particularly grill ovens, can ignite and start a nasty fire if they are left covered in uncleaned grease.

Sound alarmist?

The 2007 fire statistic report from the Department of Communities and Local Government indicated that 55% of all domestic fires started on a cooking appliance*

If that isn’t grounds enough for concern, it might be a sobering thought to remember that some buildings insurance for landlords may have clauses relating to the landlord’s obligations concerning the cleaning and maintenance of cooking appliances.

Who is responsible?

Well, you could start a philosophical debate with your insurance company and maybe tenants.

You could perhaps also go around to your tenants and start making impressive speeches and sarcastic observations about the need to keep cooking appliances clean.

Satisfying as both those courses of action may be, if the chips are down (no pun intended) and you suffer a fire, you may find that the buck stops with you.

Doing something about it

In the final analysis, as so often is the case in the life of a landlord, you may just have to accept that this is something you need to deal with periodically – just as you hopefully do with electrical and plumbing inspections etc.

So, here are a few helpful tips:

• periodically and regularly inspect your cooking appliances to ensure that they are clean and free from accumulations of grease and fat;
• in between lettings, if you personally clean then make sure this area receives special attention;
• if you use agency or private cleaners, ask them to guarantee that grills and ovens will be cleaned and check that they have done so;
• make sure that the obligation to keep appliances clean and safe is also written into your rental agreement documentation as being a tenant responsibility.

If this all seems like a mixture of overkill and stating the obvious, well, just think about the costs and potential issues for you if you get it wrong.

They could easily be horrendous and perhaps all easily avoided with the use of a bit of extra cleaning material!

* Source: http://www.landlordzone.co.uk/blog/news/landlords-urged-to-clean-up-their-act

The basic components

As a landlord, the first thing perhaps to grasp is that ordinary owner-occupier insurance protection typically won’t cover your situation.

The risks you face (and which are shared by your insurance provider) as a landlord are simply different to those of an owner-occupier.

For a start you have tenants in your property, which is good in the sense that it generates income for you – but it also adds risk.

Tenants may be injured by something subsequently found to be attributable to your property or they may create problems within the property itself. In either situation, these are not risks applicable to an owner-occupier.

That’s why, when you’re looking for insurance for a buy to let property, you should be looking for a landlord insurance quote rather than a traditional home buildings and contents insurance quote.

What is a landlord?

That leads into a second critical point – the definition of a landlord in terms of a landlord insurance quote.

Typically, landlord insurance providers will have their own definitions and conditions that should be read carefully.

That may be particularly important because if you have changed use of your property from owner-occupied to rented-out, you may have invalidated your existing owner-occupier cover.

As a broad rule-of-thumb, a property may no longer be considered as owner-occupied if you obtain income from it including:

• fully and regularly renting it out;
• renting it out only for parts of the year (eg. rentals during holiday seasons);
• renting out only part of it while you occupy the rest.

In principle, this applies whether your property is a house or a flat in a larger block.

Taking chances here around points of fine definition may be very risky. In the event of a claim, insurance companies may have ways of finding out the occupancy status of your property and you may find your claim refused and facing false-claim proceedings.

A landlord insurance policy

Typically, a landlord insurance policy may cost a little more than an owner-occupier policy – but that may be well worth the price of having some degree of peace of mind.

Policies cover details vary again by provider but typically will offer financial protection in the event of:

• third-party public liability claims in the event that a tenant or a member of the public lodges a claim against you for damage or injury suffered as a result of your property;
• cover against the usual panoply of natural disasters;
• legal cover (against some forms of risk – it is advisable to check the specifics when asking for your landlord insurance quote);
• loss of rent arising from insured perils (this typically won’t include tenants that flee leaving large arrears);
• some providers may also cover malicious damage from tenants.

Landlord insurance – sensible protection

If you’re a landlord then by definition you have a business.

Taking steps to ensure that your business is protected by suitable insurance seems intuitively to be a sensible step to take.

That’s why getting a specific landlord insurance quote may be important and a way of reducing your financial exposure in the event that bad luck strikes your property.

That’s because any change of use from owner-occupier to residential let needs a different type of insurance, even though the actual bricks and mortar remain the same.

Landlord insurance is needed because the risks change. So, what do you need to consider if you let out your property?

Public liability insurance

Apart from the obvious risk of allowing your property to be looked after by someone else – your tenants – you might also have to consider the implications of what would happen if they were injured as a result of some defect in or around your property.

They could decide to sue you and you could potentially find yourself facing a huge bill for damages.

Without public liability insurance cover, you might have to face the prospect of finding this sum from your own finances – perhaps not that easy when you consider the size of some court awards of this nature.

Having landlord insurance that covers landlords’ liability as standard, as well as some forms of legal fees, may be a sensible precaution.

Buildings insurance

Your buy to let buildings insurance will typically provide cover for damage caused by the standard perils like fire, flood and storm damage etc. Not all policies provide for subsidence as standard although there are some that do.

Building cover for your buy to let property will typically also provide for the rebuild costs or replacement of your property and the amount you insure for should be as realistic as possible.

You may need to bear in mind that the replacement value is unlikely to be the same as your purchase price though.

You may have paid more for a particular property just because it was in a desired location – so you may find that the rebuild costs could be less than the actual price you paid.

On the other hand, the rebuild costs for a solid stone build may be more than you actually paid in the first place.

There’s not really any hard and fast rule, so a professional survey may often be the best and only way to arrive at an accurate figure.

Remember that the rebuild costs of the building itself may also need to include other factors like preparing the site, architects fees, etc.

Damage by tenants

Damage by tenants, either malicious or accidental, can happen. Some providers of landlord insurance may provide cover for such incidents – possibly as an optional extra. We are unusual in that we do offer cover for malicious cover as part of your landlord insurance package.

Occupancy issues

While from a business perspective 100% occupancy of your buy to let property may be highly desirable, the reality for many rentals is that your property may lie empty from time to time. This could be as a result of:

• a lengthy gap between rentals;
• renovation or repair work going on;
• building or conversion work following purchase.

Whatever the reason, you may need to ensure that your landlord insurance provides specific empty property cover for these unoccupied periods.

In some respects you could be right. That’s why there are specialist providers of insurance for landlords around, typically on the internet, who can help you decide what are suitable options in terms of cover for your property and your circumstances.

The basic principles of landlord insurance cover may, though, be fairly straightforward and break down into a few main categories.

The building

Whether you own your property outright or have a buy to let mortgage on it, your property is an important asset, which also hopefully provides you with an income.

Protecting this asset and your income against unforeseen events may be a high priority for you. Indeed, if you have a buy to let mortgage it may be mandatory condition of your loan.

Buildings insurance provides cover against what the insurance industry terms the perils. The perils include things like fire, flood, storm damage and earthquakes etc. Things that typically can damage the fabric of the building or even destroy it.

So, building insurance will cover the property itself and basic fixtures and fittings such as the bathroom fittings, kitchen units and sink. It helps provide the finance for the repairs or, in extreme cases, the rebuilding (subject to any policy excess).

The contents

Contents insurance for landlords typically covers those things that can be moved. If you were to sell your property, you may possibly take these things with you or include them in the sale as additional extras. Buy to let contents insurance typically covers things like carpets, furniture, curtains, the cooker, fridge etc.

If you rent out your property as furnished or partially furnished then you are agreeing to let other people use these belongings.

It may be that you may think that your contents are not worth very much and are therefore not worth insuring. That may be a costly mistake. If your were to add up how much it could cost to replace them, then you may come to a very different conclusion.

Contents cover for landlords may be sold as a stand-alone policy but may also typically be found as part of a buildings and contents landlord insurance package.

The people

Buildings and contents insurance for buy to let properties may provide financial protection for accidental and possibly malicious damage caused by your tenants note that not all insurers will cover malicious damage).

However its not just tenants that you may have to worry about.

If a third party suffers an injury caused by your property then they could sue you for damages.

If you were to be found liable, then without public liability landlord insurance cover you may find that you would have to fund these damages yourself. Even if no case was proved against you, you may still have to cover your own legal costs – which could be substantial.

A complete package

It may be easier than you thought to purchase buy to let insurance. Specialist advice is available on the internet (and on the telephone too, if you use our service) to point you in the right direction for the landlord insurance package that may be suitable for your property.

Replacement value

One of the things that may play an important part in determining the price of premiums for your landlord insurance quote will be the replacement value of your property.

Your first thought when trying to come up with a replacement value figure (known as the ‘sum insured’) for your property may be that it should simply be the price you actually paid for it at the time of purchase.

It’s not really just quite as simple as that, however, as the replacement value ideally needs to reflect the actual cost of rebuilding the property and not include the cost of the land (which would have been part of the purchase price).

So, you may think you need to get landlord cover for a lower sum insured than what you actually paid for the property.

In some cases however, the sum insured required could be more than you actually paid for the property and traditional stone built properties may be a good example of this.

In other cases though, for brick or timber built properties or those in particularly desirable areas where you may have paid a bit extra for the postcode, you may find that the replacement value of the property may actually be less than you paid for it.

The replacement value is typically unlikely to ever be exactly the same as the amount you paid originally for the property, so getting advice from one of our friendly team of experts may be highly advisable if you want to get your level of cover right.

No claims discount

As a landlord, it may be in your best interests to keep your property in a good state of repair for a number of possible reasons including:

• tenants may be more likely to rent from you if you have an attractive and well-maintained property on offer;
• keeping up to date with repairs and general maintenance jobs may enhance the value of your property.

There are two other reasons though, which could have a direct influence on the cost of your landlord insurance quote. These relate to insurance claims and their consequential effect on your no claims discount or bonus:

• a well maintained property may be less prone to suffer storm or wind damage that could result in a claim on your insurance – in fact some insurers may reserve the right to question a claim where the property has not been subject to reasonable care and maintenance;
• similarly, third parities may be less likely to suffer injury or damage from falling slates, tripping over loose carpets or floorboards etc if these are all in tiptop shape.

Getting the deal

As you can see, there are potentially many things that you may need to factor in when getting a landlord insurance quote. If you require further guidance and advice on this, then we will be more than happy to help, so please feel free to get in touch!

Meaning of cheap

There’s an old joke that in life only chicks go cheep!

Of course, all insurance costs money. The insurance companies offer to take financial risk away from you and they expect to be paid for so doing.

Yet within that, there is scope for variation.

Not all insurance companies see risks the same way and they therefore don’t always calculate the amount they need to cover those risks in the same way either. Each insurance company will also have its own cost-base that will affect how they work out their prices.

Then, there is also variation around what cover they provide. Some policies may cover things that others don’t. Typically each will have different sets of exclusions, conditions and excess.

All these things need to be considered before you can typically decide whether one form of insurance is truly cheap landlord insurance or not.

Buy to let landlord insurance

So, if you’re looking for cheap landlord insurance, what does this actually mean for you?

The first message is perhaps that what’s cheap for one person will not necessarily be cheap for another as your needs may be different to that of another landlord. For example, you may purchase a let property insurance that is all-singing-all-dancing, giving you extensive cover. Compared to a similar policy that offers the same benefits but is more costly, your policy could be considered cheap.

However, compare your policy to one that offers only basic cover, which will undoubtedly be cheaper, and your policy could seem expensive!

Cheap and cheerful

So, in the case of buy to let landlord insurance cover, only you can decide if the cover really is cheap, but do note that in many cases, you get what you pay for.

Some policies may offer a fairly basic level of protection for your asset and business and the insurance providers may have priced it accordingly. That may be fine for some landlords.

By contrast, other policies may offer a much more detailed level of cover and protection and that will need to be paid for through the premium charged.

Evaluation

The buy to let UK marketplace is now a large sector of the property market.

If you’re a landlord operating within it, keeping your costs down is probably a priority but before going with the cheapest form of insurance in headline terms, it might be advisable to carefully consider some of the above factors.

Your insurance arguably serves little purpose – until you need to call upon it for help.

So taking the time to be sure that you have selected and paid for the insurance that’s appropriate to your needs is typically a good idea. It may be possible to find cheap landlord insurance that still gives you what you need in the event of a crisis – and by using the service of a specialist, such as ourselves, we can help find you a suitable landlord insurance deal.

This occurred while he was attempting to discuss rent arrears.

The news that the killer was sentenced on 13th May* to a minimum of 17 years without parole will have been welcomed by many and one’s deepest sympathies naturally go out to the man’s family and friends.

The terrible murder raises yet again thoughts about the risks and security issues that may come with the territory of being a landlord.

Fortunately such appalling and extreme events are relatively rare. Even so, confrontations and incidents of less serious violence may be rather more common as may be situations where a landlords’ property is damaged and/or the contents stolen.

In reality, there may be little that you can do to absolutely guarantee 100% personal safety or the security of your property.

The usual good practices of trying to vet tenants carefully in advance, avoiding confrontations and not progressing difficult discussions when the other party appears to be under the influence of drinks or drugs are all reasonable precautions – but they cannot guarantee protection in themselves.

Even where personal confrontation is avoided, some tenants may be inclined to take out their particular view of life on your property, fixtures or contents the instant you’re not around or shortly before they depart etc.

Although the vast majority of tenants are perfectly responsible, the small minority can make personal and property security a nightmare. Some forms of let property insurance may help with some of the financial aspects of property damage and theft but they cannot deal with the psychological effects that experience of assault or property damage can bring.

Some landlords believe that the law needs to be changed to allow the police to intervene more easily and effectively in cases where tenants are proving difficult. At the moment such situations typically come under civil law and the police are reluctant to intervene.

Some argue that earlier intervention of the police may prevent some tenants from escalating the situation to confrontation, property damage and perhaps even violence – and that could only be a good thing.

The position is evolving and we’ll watch it with interest

*Source http://www.landlordzone.co.uk/blog/news/man-jailed-for-landlord-murder