Landlords Contents Insurance
Landlords Contents Insurance
Let’s say you are Property Investor and the immediate thought is let’s get the building covered as that is where the biggest risk is. Right? Well, not ALL of the time. Yes, or course get the building insured as a matter or priority to get immediate protection on your hard earned investment, but don’t forget about the contents which becomes even more important when the property becomes occupied by a tenant. Let’s look at why in a moment, but first, what is landlords contents insurance?
Question: What is the most common Landlord Insurance Claim. Answer: Escape of water claim to landlords contents including carpets!
What is landlord contents insurance?
These are the contents owned by you, the landlord. Imagine you but a property to rent out and decide to get a tenant after some general sprucing up of the property. Then you get the usual beds, tables, chairs, carpets, curtains, and so on. These are YOUR contents and can only be insured under a landlord contents insurance policy. Policy often forgotten about but shouldn’t be and for some important reasons that many investors don’t even consider.
What is covered under a landlords contents insurance policy?
Well much like a residential buildings insurance policy for a landlord, the contents will cover what are known as certain ‘perils’. So, fire, flood, theft, malicious damage (but not always by your tenant), escape of water and so on. So not much new here. However, there is one very important cover attached to landlords contents insurance, and that is Property Owner’s Liability – sometime referred to as Public Liability.
When do I need landlord contents insurance?
Quite simply if you own contents in a property you rent out to a tenant. However, it becomes particularly important, when you own a flat within a block form example. This is often where property investors fail to take out a simple contents policy. Let’s look at the below example:
Block of Flat Contents insurance example
A single self-contained flat is purchased by a property investor in London, under a long lease. The property is purpose built block with 12 flats over 3 floors. As the new leaseholder, the owner can decide to live in it if he chooses, but instead decides to start making some money back on his investment – he decides to look for a tenant.
Luckily the investor has purchased the flat, where the buildings are already covered (along with the 11 other flats) by the management company of the block. The investor thinks no need to worry about any insurance, sure my contents where 2nd hand and not of any great quality, and anyhow what could possibly go wrong?
So the tenant has moved in. The tenant decides to have a friend over, and that evening the friend trips over the carpet end, falls & breaks an arm. The friend happens to be a surgeon and now is unable to work. The landlord takes note of the incident and report to the buildings insurer. However, the insurer argues that the claim happened due to the carpet end and that the claim should be reported to the contents insurer. The investor does not have contents insurance. The guest then goes to a solicitor and the solicitor goes about his business, and attempts to find the property investor negligent for not fixing the carpet end correctly to the floor. This is a basic example of hassle no one needs. With simple contents insurance cover, the insurer would step in and take care of this claim on behalf of the investor.
Residential Buy to Let
These policies are not only useful with single self-contained flats, but also for buy to let houses. One of the most common claims in a landlords property is escape of water. Burst pipes are an all too common experience for many landlords. Having to replace carpets can be expensive, and far too many landlord bare the brunt of the costs themselves as they have failed to take out a contents insurance policy.
A typical landlords contents policy can have Liability up to £5,000,000 and grant £10,000 of contents cover.
Call Property Insurance Centre today for a tailored quotation. Call 0800 085 3761 and speak to one of our Level 3 Qualified Insurance Technicians, to ensure you are getting the correct guidance.