Choosing Buy-To-Let Property Insurance

Risk is an area often overlooked by landlords, but failing to protect the main assets of your business, which often have borrowings secured against them could lead to ruin.

Landlords often fail to understand the types of insurance risks that they are exposed to and are unaware that insurance coverage for buy-to-let investments is very different to the standard household insurance policies that cover owner-occupied dwellings.

Therefore, landlords are advised to seek the services of specialist insurance companies catering for the buy-to-let market.

Essentially there are five broad categories of landlords insurance:

-- Landlords buildings insurance

-- Landlords contents insurance

-- Emergency assistance

-- Legal expenses insurance

-- Rent guarantee insurance

Landlords buildings insurance

These are the core policies and will generally provide coverage for a number of perils including fire, flooding, burst pipes, malicious damage and owner's liability.

It is worth checking the policies of each insurer as the perils covered may vary. Other issues to be aware of are the amount of money the insurance company will pay out in the event of damage occurring, types of tenants (student tenants are perceived to be higher risk) and consent to let from your mortgage lender, as failure to gain consent will render your insurance void in the event of a claim.

Landlords contents insurance

Many landlords insurance specialists will offer the option of limited or full contents insurance.

Limited contents policies are designed for properties that are let unfurnished or part furnished. A typical policy would provide cover of up to £5,000 for items such as curtains, carpets, white goods and light fixtures. Most policies will also provide employers and landlords liability cover in relation to these products.

Liability cover is important, as the number of personal injury claims relating to contents has risen at an astonishing rate since the 1990s, with awards in excess of £100,000 not uncommon.

Full contents policies are for fully furnished properties or for limited contents that would cost more than £5,000 to replace. When applying for full contents insurance, ensure you value the contents for the cost to replace them, opposed to the actual value that you think they are worth.

Emergency assistance

Cover is provided for general property emergencies, such as failing electricity supplies and cooking facilities, plumbing problems, leaking roofs and guttering, and damage to doors and windows.

Typical policies will provide parts and labour up to a specified cost, along with a 24-hour call out helpline number.

This sort of insurance is most suited to landlords who do not live near their property and have not contracted their managing agent to provide such a service.

It should also be noted that these policies only cover emergency call-outs and are not a general repair service required through lack of routine maintenance.

Legal expenses insurance

Problems can always occur with tenants and in many cases it is a change of personal circumstances such as job loss, accident or illness that will affect the tenants ability to pay rent or look after the property correctly.

Resolving such situations will usually involve expensive legal costs, sometimes running into thousands of pounds and legal expenses insurance is generally recommended.

Rent guarantee insurance

These policies guarantee that rent is received regardless of the tenants personal circumstances or ability to pay. These policies are most useful for landlords who have a mortgage on the property and are relying on the rental yield to service the loan. Policies will often guarantee rental payment for periods of six or twelve months.

Regulation

It is always advisable to shop around for insurance and understand what each policy provides. Always ensure that the insurance provider is a member of the General Insurance Standards Council (GISC) and is fully regulated by the Financial Services Authority (FSA).

Please note that this article is for information and guidance purposes only. With all financial matters you should seek professional advice with respect to your own specific circumstances.

Don Suter is Managing Editor of the UK Property Portal (http://www.ukpropertyportal.co.uk), an online directory and magazine for UK property sales, rental, surveyors, mortgages, conveyancing, property insurance, removals, news, investment and development

---

What Does Buildings Insurance Cover?

You will find that your lender will insist that you... Read More

Mortgage Life Insurance

Owning a home is a dream for most of us,... Read More

Health Insurance, What Does It Mean?

Your health insurance policy is an agreement between you and... Read More

Self Employed Health Insurance - Tips For Getting Cheap Health Insurance When Youre Self Employed

If you're self-employed and facing high health insurance bills, there... Read More

The Need For Life Insurance

A person needs to reexamine their life insurance needs every... Read More

Medical Insurance - Health Insurance Coverage & Plans Explained

If you're trying to decide between health insurance plans, you'll... Read More

What You Need to Know About Auto Insurance

Let's be realistic, everyone needs to have auto insurance. Aside... Read More

Is Your Financial Security at Risk?

The topic of insurance is not sexy by any means.... Read More

Life Insurance: Why Theres No Need to be a Desperate Housewife

Life insurance looks set to make a comeback in the... Read More

Business Insurance ? And What You Need To Know

Getting your business up and running is exciting, challenging and... Read More

Family Health Insurance Plans - How to Find The Best Provider Online

Family health insurance plans typically need to offer more coverage... Read More

Insurance For The Self Employed And Those Seeking Health Insurance

First of all, congratulations on deciding to go out and... Read More

Cheap Insurance - Ten Ways

Cheap insurance? Auto insurance, life insurance, health insurance, liability insurance... Read More

Life Insurance, the Universe, and Everything

You may have noticed that life insurance is coming back... Read More

CarInsurance.com Is Available At All Dealerships With Internet Access!

You are ready to buy your first car. Researching the... Read More

Seven Steps to Filing Your Car Insurance Claim

Having even a teeny-tiny car accident can be one of... Read More

Underwriting Life Insurance For Diabetics and Diabetic Life Insurance Information

Life Insurance Companies differ in their "underwriting philosophy" when it... Read More

Facts About Renters Insurance

If you rent an apartment or house, you might consider... Read More

Insurance For All Your Gadgets

Personalisation, Digitalisation, Mobilisation, these 3 words represent your life today.... Read More

Cheap Term Life Insurance is Available Everywhere

Cheap term life insurance is easier to get than most... Read More

What is Home Insurance?

Home Insurance is designed to provide you with financial protection... Read More

Cheap Auto Insurance Quotes ? Tips For Getting The Lowest Rate

Finding auto insurance quotes online is easy, but finding the... Read More

Alternate Risk Transfer (ART) - Insurance Strategies

Risk ManagementAlternate Risk Transfer is a fancy way of saying... Read More

Long-Term Care Insurance: Eldercare Solution

When I suddenly had to become a fulltime caregiver to... Read More

Choosing the Best Life Insurance Option for You

Life insurance in the UK is becoming more and more... Read More

Insurance and The Engineer

The world is no longer right when the two words,... Read More

The Life Insurance Quote Business is Booming, but is the Insurance Quote Accurate?

The life insurance quote business online is booming. Not only... Read More

Life Insurance Basics

One of the most important things you can do as... Read More

Life Insurance Careers

Do you like to spend all day being sitting around?... Read More

Hidden Ways to Cut Car Insurance

Consumers are countering rising gasoline prices and other vehicle operating... Read More

Car Insurance Discounts

Trying to save money wherever you can is important to... Read More

Car Insurance No Claims Bonus Explained

No Claims Bonus is a term used to describe the... Read More

Group Term Life Insurance and the Options Available

Group term life insurance is more affordable than individual life... Read More