Belvoir – the UK’s leading lettings specialist – is now urging landlords to check their insurance policies to ensure they are adequately covered for as many eventualities as possible.
“Specialist insurance which provides adequate cover in case of emergencies such as fire or flood is vital for landlords,” says Steve Tunney who owns the Belvoir Lettings office in Stony Stratford.
“For example, we were recently called by a tenant very early in the morning to advise us that gas main had burst outside the property and the front of their house was being burnt by the gas flame, the landlord who if she had buildings and contents insurance with us would not only be covered for the cost of damage to the property, but also covered for the loss of rent whilst the property is being repaired or the cost of paying for alternative accommodation for her tenants.”
Steve says: When you consider the greater exposure to risk faced by renting out that property it obviously makes sense to make sure it is adequately protected. Landlords “buy to let” insurance is very different from conventional home insurance in many ways because there are numerous specific considerations”.
“For example, a landlord policy can give up to 120 days cover for un-occupancy, when the norm is 30 days which is particularly useful for properties that could be empty for several months during a refurbishment period.”
Other key points to consider when looking for the right type of insurance:
HIGH RISK
Check what the insurer has excluded for what they may consider as “high risk tenants” such as students, multiple single sharers, asylum seekers or tenants on state benefits.
FIXTURES AND FITTINGS COVER
Let unfurnished or part furnished limited contents cover is essential to cover fixtures and fittings such as sanitary ware and light fittings.
REBUILD COSTS
This is the amount of money that would be necessary should the house need to be rebuilt. It is not the market value of the property. Making the mistake of giving the market value could have a considerable effect on the premium quoted, as the rebuild cost is usually lower than market value. But be aware that there could be instances where the rebuild value could be higher than its market value. Older houses in a lower priced area of the country will probably cost much more to rebuild than their market value.
LOSS OF INCOME
Imagine your property is uninhabitable as in the case above. Your tenant is forced to move out and decides to initiate legal proceedings against you for a variety of related factors. Where standard home insurance would give only cover for damage to the property and your possessions, landlords building insurance could provide cover for the loss of rental income, cover for alternative accommodation for your tenant – plus cover your legal expenses against your tenant’s lawsuit.
RENT GUARANTEE COVER
Covers the rent if a tenant defaults on rent payments. This is a valuable insurance for a landlord that could experience difficulties in making mortgage payments. Some insurers also offer the option of legal cover to assist with pursuing the errant tenant.
LIABILITY
As a landlord you are responsible for the health and safety of your tenants. Liability cover will protect you against lawsuits for compensation claims as a result of accidents, injuries or even fatalities at your property and as a result of loose carpets, faulty light fittings and defective cookers. The typical maximum for standard liability is £2m.
KEEP EVERYONE INFORMED
Failure to notify your mortgage lender, insurer and lessee that your property is rented these parties could result in insurance claims being refused.
Belvoir’s recommended insurance company is LetAlliance who has worked with Belvoir to produce what the two companies consider to be the most comprehensive and
innovative insurance product ever to be offered as a bespoke product for the lettings industry, landlords and tenants. More information can be provided by your local Belvoir office on 01908 562582 or via email: miltonkeynes@belvoirlettings.com
