Thursday 10th May 2018
Often the best way for a landlord to protect themselves, their property and indeed their tenants is to take out appropriate landlords’ insurance, which differs from standard home insurance as it generally does not cover any claims made against a buy-to-let property; leaving the actual property, its contents, the landlord and the tenants occupying the dwelling vulnerable.
According to a new study by Simple Landlords Insurance, a quarter of residential landlords in the UK unwittingly have the wrong insurance, having mistakenly insured their properties with a standard home buildings and contents policy.
It is important that landlords understand that renting a property is a business and standard home insurance may leave them vulnerable and open to injury claims from their tenants, according to Tom Cooper, director of underwriting at Simple Landlords Insurance.
He said: “Those who have bought a home policy clearly want to protect their investments but have unfortunately mis-bought a policy that doesn’t give them the protection they need.
“A home insurance policy will not cover you for loss of rent, it will not cover you for legal fees in the event you need to pursue an eviction, and it may altogether void any claims you have to make. Any property is going to be the biggest investment you make – and not protecting that properly could cost you dearly.”
A further 3.5% landlords surveyed said they did not have insurance and 4% were not sure if they had insurance or not, while 41% reported buying specialist landlord cover.
The remaining quarter of landlords could reduce their insurance spend by avoiding duplicate cover as 25% said they bought both specialist landlord and standard homeowners cover, suggesting they did not understand that landlord insurance also covers the risks to buildings common to both owner-occupied and rented properties.
Most landlords said price was a very important factor in their choice of policy (86%), hotly followed by good cover in their policy (85%) and the availability of additional covers such as home emergency or malicious damage by tenants (70%).
Cooper added: “High quality insurance, at the right level for your personal risk can help free landlords to diversify their strategies and think differently about how, when and where they invest.
“Whatever the reason, landlords - especially those with growing portfolios - are put off by the complication of moving their insurance. But it’s always worth shopping around to get the right cover at the best price, and the burden of administration is usually taken on by the insurer.
“Even if you’re not swapping, you should never accept an unjustified hike in price. Unless something has changed significantly at your property or you’ve had a major claim, year on year you shouldn’t be seeing your premium go up by more than about 5%.”
Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!