Purchasing Landlords Insurance will help you protect your earnings and tangible assets
You may not classify yourself as a business; however, by earning money through rent, you will for insurance purposes be classified as one. A standard home insurance policy is not usually suitable for covering your property which is let out and in the event of a claim may be rendered useless, notwithstanding the gaps and inadequacy of cover. Moreover, letting without consent of your insurer could invalidate your home insurance. To protect your earnings and tangible assets you will require a landlord’s insurance policy, also referred to as property owners insurance.
What will Landlord Insurance Cover?
The buildings and outbuildings including fixtures & fittings, sanitary ware, gates, walls, fences, driveways etc.
Landlords Contents including removable furniture, decorations, white and brown goods, carpets, curtains etc.
Loss of Rent to cover loss of earnings while the property is uninhabitable following an insurable loss (e.g. Fire, Flood, Escape of Water etc.) and not to be confused with "Rent Guarantee" which covers rent arrears.
Property Owners Liability which provides the landlord with protection for third party claims brought against them (e.g. Slip and trip claims within the property boundary, impact by falling roof tile etc).
Malicious Damage by Tenant
Subsidence - occasionally an opt in cover
Accidental Damage e.g. Foot through the loft, nail through a pipe, impact to sanitary ware and impact to glass etc.
Dependent on the insurer certain covers and sums insured will be provided as standard whilst others will offer them as optional extras. It's always best to double check when making a like for like comparison. Please note that the above is not an exhaustive list and other covers and benefits can be provided.
Rebuild Sum Insured
Unlike Home Insurance policies which often provide high standard limits, a landlord insurance premium is largely calculated by the requested re-build value. It is therefore essential that you get this right. This sum should cover the total cost of rebuild from scratch, removal of debris and surveyors cost to rebuild from new and exists to cover the repair cost of damage through to reinstatement following a total loss. Being underinsured will leave you vulnerable to paying the difference as per any condition of average which is applied. Effectively, trying to save a few pounds in premium could result in the policy being worthless in the event of a claim.
Advice - Apart from obtaining a full rebuild survey, it is always prudent to seek the knowledge and advice from a trusted builder or surveyor, refer to any previous mortgage surveys or access free online rebuild calculators that can assist in providing you with rebuild cost such as the BCIS Public Rebuild Calculator.
Policy Excess - This is the amount you must contribute in the event of a claim and will vary depending claim types.
Change in Circumstances
Be sure to advise your insurer without delay should there be any change in your circumstances! If the property becomes unoccupied typically for 30 days or more then you must advise your insurer. Changes in occupancy from one tenant type to another e.g. A Professional Working Tenant/family, Students, DSS, Council Tenants, Related Family Members and any Sub Letting agreement.
For further information and advice please contact John Whippy Insurance Brokers.
John Whippy Insurance Brokers, Covering you for life's unexpected