Public liability

As a landlord, you have certain responsibilities to your tenants and members of the general public.

If someone is injured or has their property damaged and it can be shown to be as a result of your property, then they could sue you for damages.

Public liability cover may often come as part of buildings insurance and will help ensure that, if this happens, you have cover behind you to help pay any court awards arising from the court action plus legal fees and expenses.

Protection of this kind may cover events like;

• a passer by in the street being hit by a slate or chimney pot falling from your roof;
• your tenant falling down stairs and being seriously injured after tripping over a loose floorboard that should have been properly maintained.

It may be worth pointing out that legal fees may still be payable even if no case is found against you.

Other legal issues

It’s not just in the area of public liability that you may benefit from letting property insurance that provides legal assistance.

Some, but not all, buy to let policies will provide legal assistance for lawyers to assist you in other areas though this may not include situations such as the recovery of rent arrears of the eviction of people who have no legal right to be on your property.

The extent of legal coverage may vary significantly between policies and it’s typically a good idea to read the cover carefully.

Nice to have

When you first think about rental property insurance; getting help with legal issues may not be the first thing that comes to mind.

You may obviously attach more importance to the more traditional areas like buildings insurance and cover for your contents, fixtures and fittings.

However it seems that in our modern day lives legal actions of one sort and another are becoming more and more commonplace.

So, having a little help as part of your letting property insurance package may be no bad thing.

Definition of a landlord

Some people sometimes express surprise when they’re described as a landlord.

The reality is though that if you rent out a property in all or part, then by definition you’re obtaining income from your property and are therefore a landlord.

That’s an important point because it means that not only may you have certain legal obligations but also your insurance position is significantly different to that of an owner-occupier.

Letting property insurance

If you’re a conventional owner-occupier, you may have the traditional cover of home buildings and contents insurance.

Such a policy is generally not suitable for a landlord. In fact, if you change the nature of your property’s occupancy from owner-occupier to rental, then typically your existing buildings and contents cover will become invalid.

The reasons for this are quite simple – your risks have changed.

Landlord risks

As a landlord, you have all the well-known risks of fire, flood and so on, but the fact that you have tenants means that you have a variety of additional risk factors.

For example, insurance providers typically see:

• having tenants and their guests in your property may mean that you’re more at risk from third-party liability arising from accidents and injuries deemed to be attributable to your property and its maintenance;
• problems that you as an owner-occupier may notice and deal with immediately (eg. small leaks) may be ignored for longer periods by tenants thereby increasing the possibilities of major problems arising and potentially larger claims;
• your property may be empty for periods due to gaps between lets etc.

Letting property insurance (as well as vacant property insurance if your property stands empty for around 30 days or more) needs to take these things and others like them, into account.

Cover provided

This form of rental property insurance (sometimes also called buy to let insurance) may also provide cover for, in some cases, a loss of rental income where this is related to an insured risk.

As touched upon above, it’s probably worth keeping in mind that any property that stands empty for more than 30 consecutive days (eg. during redecoration) may count as an unoccupied property and may therefore require special unoccupied property cover.

Having a suitable form of letting property insurance may potentially help you avoid financial ruin – it’s therefore perhaps worth thinking about in more detail.

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.

The reality

The insurance risks associated with a buy to let property (or a property you have decided to start letting out in full or part) are typically higher than for an owner-occupied one.

Insurance companies typically know that only too well and that’s why they may charge a little extra for landlord or buy to let insurance compared to a standard owner-occupier home insurance policy.

So, insurance companies do care very much indeed about whether or not your property is rented out as it affects the risks they’re covering for you.

The owner-occupier policy myth

There are two potential scenarios here:

• you’ve started renting out all or part of your property currently covered by owner-occupier insurance; or
• you’ve got a buy to let property that you’ve taken out an owner-occupier policy for.

In either case, you could potentially be in trouble if your property suffers a problem.

In the first case you may have invalidated your existing policy.

In the second you have made a false declaration for the purposes of obtaining insurance. If you followed that up eventually with a claim, you could be found guilty of making a fraudulent claim and that may be a serious offence.

The knowledge myth

You may sometimes hear apparently sage words to the effect that your insurance company would never know. Believing that may prove to be another grave mistake!

To the contrary, insurance companies do have ways of checking the nature of the occupancy – particularly in the event of a claim. Being caught out could have serious consequence both in terms of your claim being refused and you being unable to secure insurance in future.

Getting the most suitable cover isn’t cost-prohibitive

All this may be unnecessary.

The good news is that typically the cost of landlord insurance is only a relatively modest amount higher than that of owner-occupier cover but will give you the peace of mind that your asset is properly protected.

Through our service, we can help you find suitable letting property insurance at a price that suits your budget. You can do this in one of three ways:

• use our website and get a landlord insurance quote and buy online;
• contact us via email; or
• if you prefer to speak to someone, then call our friendly team to discuss all your letting property insurance options. We are here to help!

Property as an asset

Many people believe that it is sensible to take steps to protect their assets.

The first stage in this is, of course, prevention. Few of us would leave our property without, for example, some form of security in place such as locks, bolts and perhaps alarms. When going away on holiday we sensibly switch off electrical systems and possibly drain down water systems etc.

Unfortunately though, however careful we are, things can still go wrong.

Natural disasters can arise. Burglars may be able to enter even well protected properties and vandals may suddenly take it into their heads to leave their mark on your property.

That’s why the second line of defence in terms of protecting your asset is property insurance so that if something goes wrong, you have a degree of financial support in place to help to recover.

Letting property insurance

In the case of rented property, the landlord insurance required needs to be fit for purpose – in other words a policy specifically covering rental properties.

This is the case because standard owner-occupier buildings and contents insurance typically will not cover rental properties or provide buy to let home insurance.

The risk profiles of rental versus owner-occupied properties are simply different and the insurance policy needs to reflect that. For example, your property is at risk from a variety of tenant related issues that simply don’t apply to an owner-occupied house.

One such example may involve accidents suffered by tenants as a result of your property and their subsequent claims against you for compensation.

Letting property insurance needs to provide cover against some forms of risk that typically do not arise for owner-occupiers.

Landlord and let property myths

You may sometimes come across people offering apparently sage advice that is, in fact, quite simply incorrect and potentially dangerous including:

• the insurance company won’t know you’re renting it out – wrong, in the event of a claim they can check the occupancy status and you may find that not only is your claim rejected but that you’re held to be guilty of making a fraudulent claim;
• you’re only renting out a room or two so you’re not a landlord – untrue, if you obtain income from renting out even part of your property you may be deemed a landlord and therefore in need of letting property insurance.

Typically, buy to let buildings and contents insurance may only be moderately more expensive than an owner-occupier property. Taking chances with your asset’s insurance for the sake of relatively small savings may not be a wise course of action.

Sleeping easily at night

Your property asset is very possibly a major part of your overall financial position.

Seeking to make sure that you understand your risks and that you have the right form of letting property insurance in place may simply be common sense.

Letting property insurance typically applies to the structure of buy to let buildings, and may also include contents cover too if you require it (ie buy to let building and contents insurance). So, if you let your properties to people who need their rooms to be partially furnished, you may need to consider taking out some extra contents insurance too.

Making sure you have public liability insurance in place will typically help protect you against the financial ramifications of a claim being made against you by a third party for loss, damage or injury caused while they are in or on your premises.

What you need for quotes

When you are looking for buy to let insurance quotes, let property insurance providers will typically want to know at the very least the following things – do note that the personal questions asked (such as whether you have previously been declared bankrupt) are usually asked whether you are buying owner-occupier insurance or buy to let cover, so don’t take it personally!

• personal details like your name and home address and whether you have been declared bankrupt;
• the address of the let property including postcode (so that they can gauge the risks of the area from the point of view of crime prevention and flooding);
• what sort of tenants you are trying to attract (some insurers will only accept a certain type of renter) and what sort of lease agreement you have;
• the sum insured required for buildings and contents cover;
• details of any security features the property has and its construction; and
• information about any previous policies that you have held. Do you have a history of making claims, or could you be entitled to a no claims discount?

This may sound like a lot of questions, but it doesn’t have to be time consuming. For example, by using our online quote and buy service, you can typically get an online quote within a few minutes.

Cover considerations

When choosing your cover, remember that the extent of the cover available typically extends to risks including fire, flood, storm and in some cases, vandalism. Although it is tempting to go on the basis of price alone, taking a moment to check what is included could save you heartache later.

For instance, what are the loss of rent provisions if your property is damaged by a covered risk and you are unable to let the property out while it is being repaired? Is any cover available for unoccupied periods (ie vacant property insurance)? Property in student areas especially may be left vacant for long periods of time so it could be worth checking whether your letting property insurance covers these periods.

Finally, when you get the details of the policy schedule, read it carefully to make sure that it is suitable for your buy to let property – in particular check,

• whether boundary structures like walls and fences are included;
• whether garden sheds are covered; and
• what contents, if any, are covered within the letting property insurance.

Some features of letting property insurance are very similar to those of standard home cover.

Buildings and contents insurance

This helps protect you and your bricks and mortar from the financial consequences of things like storm damage, floods, fire and earthquakes. To be adequately covered, it is typically advisable to be as accurate as possible about the full replacement value for your property.

It may be tempting to underestimate this value to help keep premiums down but it may be worth remembering that any claim would pay out only up to this value. If it were not enough to cover actual costs then you would have to find any shortfall yourself.

Even if your property is let as unfurnished, it may still contain some of your belongings like carpets or curtains, kitchen and laundry equipment etc. Items like these may be expensive to repair or replace and landlords contents insurance may be a sensible precaution.

Owners’ liability insurance

If you were to be sued by one of your tenants injured after tripping over a loose floorboard or by a passerby hit by a falling slate from your roof, then without owners’ liability insurance, typically you would be personally responsible for any damages awarded to the injured party.

Property owners’ liability insurance is typically included as standard in a buy to let buildings insurance policy.

Buy to let specifics

There are also other specific considerations that should ideally be taken into account when thinking about letting property insurance. Two of the main additional risks for a letting property are tenants and the fact that your property may be unoccupied for periods of time.

Damage by tenants

Damage by tenants typically falls into one of two categories – accidental and malicious. Not all insurers cover both types of damage in their buy to let buildings and contents insurance. Some do though and that could make repair or replacement of damaged items that bit easier.

Unoccupied property

Just because your property is unoccupied doesn’t mean that you don’t need to bother about insurance. In fact the opposite may typically be true. An unoccupied property is typically more at risk that an occupied one. By definition, an unoccupied property is typically one that that has stood empty for 30 or more days.

Small insignificant problems left unfixed may, over days or weeks, turn into major and expensive, headaches.

Dark windows, overgrown gardens and signs of construction work may also be advertising to thieves and vandals that your property is empty.

Unoccupied letting property insurance can help provide cover in these cases.

Standard home building and contents insurance is unlikely to provide cover for properties which are let out – specialist letting property insurance may typically be needed.

The main areas you may need to consider are:

• commercial buildings insurance;
• buy to let contents insurance;
• public liability insurance;
• unoccupied property cover.

Your bricks and mortar

Regular maintenance of any property is a good idea. Keeping your bricks and mortar in a state of good repair may be of the utmost importance if you are looking to maximise rental revenues.

Being able to deal with the more unexpected events though is often easier if you also have the protection of buy to let building insurance behind you. Covering things like storm damage, flood, fire, theft and other unexpected occurrences, commercial buildings insurance may give you the means of getting things back to normal as quickly as possible.

Some letting property insurance policies may even provide cover for loss of rent while repairs are being carried out due to an insured risk making your property uninhabitable.

Your contents

Many properties these days are let as furnished or partly furnished. It may be a sad though not unsurprising fact that tenants may not take as much care of your property as they would of their own. Small easy to fix things may be ignored until they’ve become big expensive to repair things. There’s probably not much you can do about this apart from trying to make sure that your buy to let contents insurance gives you as much protection as possible.

If may be worth bearing in mind that your letting property insurance may not cover theft of your property by your tenants. Some contents policies only cover theft following a forced entry and exit by individuals who have no legal right to be on the property.

Your responsibility

If someone is injured as a result of some failure on your part to maintain your property in a state of good repair then they may sue you for what could be a fairly large sum of money. They don’t even have to be on the property at all. Someone walking past on the street and being injured by a falling slate is all it may take to see you seriously out of pocket if you do not have the protection of public liability insurance.

Rental gaps

Tenants can come and go and it may not always be possible to achieve 100% occupancy of your property. From time to time you may need to carry out some redecoration or renovation work.

If your property is going to be vacant for any significant length of time, the conditions applied by your letting property insurance will typically change. This is mainly because an empty property is more at risk from thieves and possible deterioration due to unnoticed damage than one that is lived in. Checking with your insurer in these circumstances may be a sensible move – they may ask that you change your policy to a vacant property insurance policy, for example.