Buy to let property remains a popular form of investment for many. If you forget that your rental property typically needs special landlord insurance though, you may find that your investment turns out to be more of a millstone when trying to make an insurance claim.

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.