Landlords, you will know that owning a buy to let isn’t as simple as just letting your property to a third party. There are contracts, referencing, liabilities and maintenance but most of all the uncertainty of having somebody you do not know live in your property. This is why you need to be fully protected in all areas of your investment.
You wouldn’t insure half of your car so why insure your property without protecting it as best you can, leaving the premises and yourself vulnerable to large non-recoverable costs.
Properties can be let in various ways to various tenants. All insurance companies have their preferred and excluded types, however choosing the correct insurer, who provides necessary and proper cover, can prove tricky.
The rise of rent-to-rent, serviced accommodation and the HMO boom are regular declines from insurers so it wise to speak to an expert. Here at Insurance-Desk we are property brokers run by a staff of property owners. We can place your property needs from large HMO’s, Rent-to-Rent, Council and Vulnerable tenants, unoccupied/undergoing development, standard residential/commercial let and much more. We analyse your needs and make sure we offer the necessary protection but at market leading rates with expert advice.
Below are a few areas of cover, to highlight: (which many insurers don’t provide necessary cover)
Malicious Damage by Tenant
A lot of insurers will limit their liability in this area, if cover provided at all, to £5,000 or £10,000 to protect themselves from a major incident. This has the potential to leave you heavily out of pocket because we have seen malicious damage claims rise to £20,000+. If the tenant/s decided to completely destroy the property, leave it in a mess or even set fire to the premises, the claim will quickly rise above the insurer limit. To lower your risk, you should have a policy that has no limit and protects malicious damage by tenant claims up to the sum insured.
Many landlords let their properties unfurnished so feel contents cover is not required. Carpets, floor coverings, blinds/curtains and white goods are all classified as contents so damage to these would not be covered. New carpets can be costly so with the above in mind, contents cover should be sought after. Look for insurers who offer cover for this as standard, so you do not need to pay any premium for the cover, usually a £10,000 limit is sufficient.
Tenants may vacate your premises for several different reasons. This can be unexpectant or at the end of their AST. It may even be because the end of the tenancy agreement is the perfect time for you to carry out renovation on the property (You may still need to refer renovation works to be accepted). Whatever the reason maybe, it will leave your property unoccupied in the interim. This is another area where your cover may fall short because there is only a 30 day unoccupancy allowance. After this time, the insurer will look to reduce cover to minimum perils (Fire, Lightening, Earthquake, Explosion & Aircraft) and may even charge an unoccupied rate. Look for insurers offering extended un-occupancy periods such as 60 days or even 90 days. This provides flexibility and allows you to proceed with your plans without the rush.
Let’s face it, not many of us are experts in contract law and legal issues. Having an AST or other tenancy contract is legally binding so what happens when things go wrong. Say a tenant refuses to leave your property at the end of an agreement or refuses to pay rent and you want your property back? Defence costs, legal representation and fees can be very expensive let alone stressful.
This cover will provide you with legal assistance to repossess your property, evict squatters, disputes over property damage, rent recovery and other legal representation.
At the end of the day the reason we let a property is for the income, so why not protect it??? Maybe because its provided as a separate policy at an extra cost. With portfolio landlords the extra rent cover costs may outweigh the potential risk of a tenancy dispute arising. Fear not, we have access to a product that includes this with your cover at NO EXTRA COST. It even provides cover for multiple tenancy in a HMO and student lets etc. We can also provide this as a standalone cover if necessary.
The legal expenses, as mentioned above, element of a policy may include cover to recover any rental arrears, however this repayment is not guaranteed. Having a rent guarantee extension means that any missed rental payments from your tenants can be claimed from your insurance. This allows you to keep up with any potential mortgage payments and protects your rental income. Without this cover, a lengthy legal claim could cost your thousands in lost rent, let alone the legal costs.