There are many different providers of let property insurance and a host of different policies from which to choose. A careful landlord insurance comparison is necessary, therefore, to make sure that you are buying the cover that suits your particular needs and requirements as a landlord, at a competitively priced premium.
Independent brokers
The sheer number and variety of let property insurance providers is likely to make your comparison of the competing products difficult – especially since you need to compare like with like and include as many potential policies as possible.
Therefore, you might want to use the services of an independent specialist provider in order to make the landlord insurance comparison.
What’s covered?
For all the differences in the scope and level of cover and the prices charged for premiums, landlord insurance typically provides cover for the following main areas of risk:
Building insurance
- the most significant asset in your buy to let business is the property itself – so you need protection against the risk of loss or damage to the structure and fabric of that building;
- the authoritative work “The British Insurance Industry Since 1900: The Era of Transformation” points out that there has been no general compulsion for a landlord to buy buildings – or, for that matter, contents – insurance, although mortgage lenders typically make building insurance a stipulation for as long as there is a mortgage on the property;
- even when there is no mortgage lender insisting on buildings insurance, you may want sufficient cover to enable the complete rebuilding of the property following a major insured disaster – and to keep that valuation constantly up to date, either through index linking or periodic reference to the BCIS House Rebuilding Cost Index maintained by the Royal Institute of Chartered Surveyors (RICS);
Contents insurance
- many landlords may also want to safeguard their contents within the let property;
- the level of cover typically depends on the value of those contents, of course, with modestly-priced policies covering little more than curtains and carpets, to more comprehensive contents insurance for furnished properties;
Landlord’s liability insurance
- one of the central elements of buy to let property insurance is designed to indemnify the landlord in the event of claims of negligence causing injuries or property damage to tenants, their visitors, neighbours of the property or even members of the public;
- as the landlord and property owner, you have a general duty of care to prevent such injury and damage and any breach of that duty may leave you facing claims of substantial sums in compensation;
- since the size of such claims – especially those involving personal injury – may escalate, indemnity is typically provided for a minimum of £1 million, and frequently more;
Loss of rental income
- the fourth element of cover typically included in buy to let insurance is the provision of compensation for the loss of rental income;
- after a serious insured event, the let property may be left temporarily uninhabitable and you face the prospect of lost rental income or the cost of finding alternative accommodation for your tenants;
- landlord insurance policies typically provide an element of compensation for these losses – up to prescribed limits.
Although let property insurance may differ widely from one insurer and from one policy to another, these are the core elements comprising the typical cover.