Insurance for Let Properties
This is a most
important area that should not be overlooked when Landlords
let a property. The risks associated with let properties are
significantly different to owner occupied properties therefore
you are well advised to use an insurer who specialises in
this type of property insurance. An existing, standard, buildings
or contents insurance policy on a property owner occupied
may not cover the property or contents when it is let, may
restrict the cover and or increase the premium. Years ago
insurance companies were not happy about covering let property
in the UK, but today you have a choice. Homelet
You can obtain a quote on line and
arrange cover on line.
should remember that the following categories of Insurance for Landlords should
be looked at:
Insurance -This is for re-Build costs
- not market valuation. It is essential that your property is adequately
insured. Sometimes the re-building value will be considerably lower or higher
than its market value. Older properties in the lower priced areas in the UK will
cost much more to re-build that their market value.
the UK many properties are under insured, which means in the event of a claim,
insurers will not pay the full amount of the claim. If you have any concerns about
the amount of cover you need for re-building contact a professional qualified
surveyor. If you have an apartment, the buildings insurance will often be part
of the amount you pay out annually for service charges and ground rent. Check
out the situation with the block management agents. (See below)
should also advise and obtain consent to let your property from your mortgage
lender, existing insurer and head lessee (for leasehold properties). Failure to
obtain written consent from these parties may render your insurance void in the
event of a claim.
general insurers and mortgage lenders will not cover the property if you intend
to place certain categories of tenants in your property i.e. Student, Multiple
single sharers and tenants in receipt of State Benefits. Check this out.
buildings policies will provide an element of Employers Liability cover.
This covers claims for death or injury to anyone you employ at your property i.e.
a gardener, painter etc. If you are letting to students or to tenants in receipt
of state benefit the university / local authority will normally require a minimum
is also essential that your policy includes Property Owners liability cover
to a similar limit to cover injury, death or damage to individuals on or adjacent
to your property.
you take out a Buildings Policy the main insured perils should include
Fire - Lightening - Aircraft - Explosion - Smoke
- Impact - Burst pipes or leakage of oil - Storm or flood
- Subsidence damage - Theft- Malicious damage. (Some policies
will give the option of malicious damage caused by the tenants - a valuable option
for let properties).
policies will compensate you for loss of rent following damage from one
of the above perils if the property is uninhabitable. Check this out with your
block management agent if you have an apartment and don't arrange the buildings
Insurance - A high percentage of owner
occupied properties in the UK are under-insured for the contents. Generally individuals
place a value of what the contents are worth not what it would cost to replace
them with new items.
specialist insurers will offer the option of a full contents policy or a limited
contents policy. Limited Contents Cover. As many UK properties are let unfurnished
/ part furnished. A limited contents policy would typically give a fixed limit
of cover for items such as: Carpets - Curtains - Blinds - Light fixtures and fittings
- Kitchen white goods on a new for old basis.
your property is fully furnished or the limited contents would cost more than
£5,000 to replace, you should have a full contents policy. You would normally
select the sum you wish to insure for; again this should be adequate to replace
all of the contents on a new for old basis.
Assistance -This type of cover will provide assistance
for the landlord and the tenant in the event of an emergency at the property such
as: Failure of the electricity supply - Failure of the cooking facilities - Lost
keys - Plumbing problems - Leaking roofs or guttering - Security of doors and
windows. Policies will provide parts and labour cover up to a specified amount
and either the landlord or the tenant can call a 24hr 365 day Helpline. (Check
out the details on offer
from the insurance company)
you have not taken a full management service from your letting agent or do not
live near your property this can be a cost effective solution. Please note that
that these policies cover Emergency Assistance only and not a repair service
through lack of routine maintenance.
Expenses Insurance - Even when using
the services of a professional letting agent, problems with tenants can occur.
In many cases the tenants personal circumstances have changed during the term
of the tenancy. Situations like loss of their job, failure of their business,
a relationship break-up, accident or illness will effect the tenants ability to
pay the rent or their inclination to move out at the end of the tenancy.
these situations can be resolved but will usually involve a Court hearing and
solicitors costs. Legal expenses insurance will usually cover all of your legal
costs, solicitors/barristers fees, Court and bailiffs' costs. Most such policies
will cost well under £100, which represent less than 45 minutes of a specialist
solicitors time on a normal fee paying basis. The "average" legal cost
of a possession hearing in 2001 was £785, many cost well over £1,000.
-These policies are invaluable for many landlords. As a tax deductible premium
this will guarantee you receive the rent you are expecting from your property
regardless of your tenants personal circumstances, ability or willingness to pay
you have a mortgage on the property or have calculated your rental income verses
your outgoings this will ensure you do receive your rent. Most such policies will
include the legal expenses, as detailed above. You will receive your rent and
the legal fees to obtain vacant possession will be covered.
will usually guarantee your rental for a fixed period, typically 6 or 12 months.
Some policies will provide additional cover once you have obtained vacant possession
until you are able to re-let your policy.
costs vary from a fixed cost policy or are commonly rated as a percentage of the
annual rental figure, typically 3-4%.
UK regulations JML Property Services are unable to give advice regarding insurance
or assist with changes to insurance policies that you have taken out. You must
contact the insurer direct.
has long-established expertise in providing specialist cover for landlords. Buildings
and / or contents cover are available with a monthly premium option or as an annual
one off payment.
Extended un-occupancy cover for your buildings/ contents for periods of up to
Optional extra home emergency
Accidental damage option available
offers specialist legal expenses and rent guarantee insurance. Endsleigh's policy
provides legal defence, legal prosecution and rent arrears cover. Option of either
a 6 or 12 month policy available
against rent arrears while we handle your repossession claim
to remove squatters
Endsleigh Insurance Services Limited is authorised and regulated
by the Financial Conduct Authority. Endsleigh Insurance Services
Limited. Company No: 856706 registered in England at Shurdington
Road, Cheltenham Spa, Gloucestershire GL51 4UE
Insurance with HomeLet
is a trading name of Barbon Insurance Group Ltd, Registered
Office: 4-9 Highview, High Street, Bordon, Hampshire, GU35
0AX, England who are authorised and regulated by the Financial
Conduct Authority in the UK. Their FCA Register number is
use a letting agent?
and Homeowners often have full time jobs as well as buy
to let investments, it is therefore frequently the case
that with so many demands on their time they cannot always
be available to handle day-to-day events connected with
this sounds like you then using a letting agent offering
full property management could be an essential and economical
way of ensuring the smooth running of a tenancy, while protecting
the property and still making a profit.
letting your property through a specialist letting agent
is not strictly necessary, a good agent will take some of
the effort out of the job of finding and selecting tenants,
drawing up tenancy documents, and the day-to-day maintenance
of the property.
Because you are quite literally placing your property in
their hands, the choice of a letting and managing agent
is as important as in choosing any other professional such
as a solicitor or accountant.
demand for property to rent has encouraged many firms and
individuals to set up as letting agents many of them are
completely unregulated and have little or no experience,
do not operate bonded client accounts or are bound by any
code of practice. Remember, as the landlord you may be personally
liable for any mistakes made by your agent.