Landlord Insurance

A House of Commons research paper published in March of 2015 confirmed that private sector lettings represent the second largest form of tenure, after home ownership in the UK.

Although both owner occupiers and the landlords of let property share an interest in safeguarding their investment in bricks and mortar with insurance, it is important to distinguish between standard home building and contents insurance and buy to let property insurance.

What is landlord insurance?

What is landlord insurance?

  • just as the title suggests, let property insurance is a financial product designed with the specific purpose of protecting a let property against loss or damage;
  • because let property represents a business investment – reliant on rental income from tenants – however, the insurance also extends to the protection of particular risks and perils such as the landlord’s liability towards tenants, their visitors and members of the public, and the potential loss of rental income in the event of a major insured event which leaves the property temporarily uninhabitable;
  • an owner occupied home and one that is let to tenants, therefore, represent two quite different uses of the respective premises;
  • this information on the use of the property – and the risks and perils to which it is exposed – is vital to any insurer, who may reject any claim made under your standard home insurance if the premises are in fact let to tenants;
  • it may also be referred to as landlords insurance or buy to let insurance;
  • let property insurance, in other words, is a specialist type of cover, about which you might want to consult an equally specialist insurance broker – such as us here at Specialist 4;

What does landlord insurance typically cover?

What does landlord insurance typically cover?

  • at the heart of this specialist cover is protection for the structure and fabric of the building from major risks such as fire, flooding, storm damage, impacts and vandalism;
  • cover for landlord’s contents can also typically be included for an extra fee and if required;
  • the risks of damage to the building or its contents are ever-present, with the National Landlords Association (NLA), for example, in a report dated the 16th of July 2015 estimating that 400,000 landlords (almost 3 in 10) have needed to make a claim following damage by tenants in the past year;
  • for all this, landlords also still have a duty of care for the health, safety and well-being of their tenants and to guard against the financial repercussions of tenants alleging any breach of that duty of care, landlord liability cover typically starts at £1 million but may also significantly exceed that limit;
  • let property insurance may also address the risk, by way of financial compensation, of lost rental income following an insured event which leaves the premises temporarily unusable;
  • some let property insurance policies are restricted in the tenant types they offer cover for, for example DHSS recipients or students may not be an acceptable tenant type. Other landlord insurance policies have no restrictions;

Who is landlord insurance suitable for?

Who is landlord insurance suitable for?

  • one of the notable aspects of let property insurance is that it may be tailored to suit practically any let property against a number of business risks – even when the premises are left empty for more than several months;
  • it is suitable, therefore, for the owners of both residential and commercial let property.

Summary

Summary

It is important to distinguish let property insurance from standard home building and contents insurance and recognise the particular business risks to which let premises are exposed.

Thanks to the product’s capability of being tailored to suit a range of different landlords, you might want to discuss your specific needs with a specialist provider of this kind of insurance.

 

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