Buy to Let Insurance
If you have already bought a property to let or you are thinking about it, make sure you take out the right buy to let insurance policy. When you are letting a property, you can’t just take out normal home insurance cover as you have additional responsibilities which you need to cover. You are not present in your property all the time, so there are also different kinds of risk that you and your property are exposed to.
So what kind of risks do you need cover for?
Everyone knows there are a wide range of things that can go wrong when you own and let out a property. From mechanical breakdowns with cookers or boilers to damage caused by a fire, flood or the tenant themselves, no one can predict what may go wrong. A buy to let policy can include cover for a wide range of issues and risks:
- The building itself is your source of income and your investment, so you need to ensure it is fully covered. Rather than insure the market value, you need cover for the cost of a rebuild in case the worst happens like a fire or a flood. While this can be hard to estimate, you need to ensure your cover is high enough or you could end up in a very difficult position. Remember that things like window and door locks and a working alarm system can help reduce the likelihood of a break in and so will also reduce your premiums.
- All properties come with fixtures and fittings but if you are also providing any furnishings, you will want to take additional cover in case they are damaged either accidentally or possibly purposely by your tenant. Unfortunately no one can guarantee that all your tenants will behave perfectly and return your property in pristine condition. Accidents do happen and things like spills on the carpet or broken windows can happen to even the most careful tenants.
- Covering any potential loss of income. If something happens your property, you won’t be able to rent it out. Most buy to let owners rely on the rental income from their property to pay the mortgage. If you can’t afford to pay the mortgage without the rent coming in every month, you need insurance to cover this risk. Things like tenants being unable to pay or water damage making the property uninhabitable can happen without warning so you need cover to make sure you can still pay your bills.
- What about your tenants if they can’t stay in the property? If repairs are needed and you have to organise them, you may want insurance to cover temporary accommodation for your tenants, otherwise you could end up footing this bill as well. If you have lots of properties you may not wish to become known as a landlord who doesn’t step in to help your tenants. If so, you may want to opt for this additional cover.
- As a landlord you are responsible for all the things that go wrong in the property if you haven’t checked everything is ok. This includes critical things like gas items being safe right through to ensuring there are no slip/trip/fall hazards such as lifted carpet. If your tenant or someone visiting them is injured or killed by a fault in the property, you must have public liability insurance. If you have staff working for you, you must also take out employer’s liability insurance in case something happens while your staff are at your properties.
- If all these different types of risk has you a bit concerned, you may want to opt for legal cover to represent you if anything goes wrong. It can help with anything from disputes to evictions to fighting your corner if something makes a claim against you.
What insurance cover do I actually need?
So as you can see there are lots of options when it comes to buy to let insurance. The must haves are insurance cover for the building itself, fixtures and fitting and public/employer’s liability insurance if these are relevant to you. Opting for the cheapest policy is not normally the best approach as you may find you are under or wrongly insured if the worst happens – and that’s not a good position to be in. As you can see there are plenty of optional extras, but rather than presume what you do or don’t need, as everyone’s circumstances are different, it is always best to discuss your needs in detail with a broker like Property Insurance Centre. Take the time to discuss your needs and get their professional advice about what would be best in your circumstances. You will find it is time well spent if you are ever unfortunate enough to have to make a claim.
Do you need cover for multiple properties?
If you have multiple properties or a portfolio that is constantly changing, don’t think you need to be continuously taking out new policies. There are a wide range of multi-cover policies available with Property Insurance Centre to make any adjustments easy to make. You will also have a nominated point of contact so you can guarantee any changes will be easy to make with a member of staff who understands your business and what you need to run it. Call us today on 0800 085 3761.