Buy To Let Insurance – Choosing The Right Policy

Buy to let insurance, also commonly known as landlord insurance, is a non-compulsory financial product aimed at private landlords. The best buy to let insurance policies cover everything a general buildings/contents insurance policy does plus things like loss of rent through the insured property being uninhabitable e.g. after a fire or flood, legal fees with regards to troublesome tenants, and even the cost of alternative accommodation for tenants while repairs are carried out.

Being non-compulsory, landlords don’t have to take out a buy to let insurance policy if they don’t want to, but as a landlord not doing so could leave you with a huge repair bill following an accident that isn’t covered by your general buildings and contents insurance. Buy to let insurance is widely available today, so all you need to do is decide which policy is best for your particular property.

Weighing up the options

The basic ingredients of most landlord insurance policies are very similar. They cover repairs to the building, the repair or replacement of landlord owned fixtures and fittings, missed rent payments because of the property being uninhabitable (following an insured accident) and certain legal fees associated with the removal of tenants and repossession of the property. The details of individual buy to let insurance policies differ though, and it is the details that affect the cost.

So for example one landlord insurance provider may only cover rent payments for a maximum of 12 months whereas another might pay up to a maximum of 36 months. Similarly one insurance provider might only pay rent payments equal to 15% of the property’s value whereas another might pay 20%.

Some buy to let insurance policies will pay towards alternative accommodation for tenants should they be forced to move out following an accident, but some won’t. Those that do may specify a maximum amount separate to the rent payments you claim whereas others deduct the cost of alternative accommodation from the amount of rent you can claim during the uninhabitable period.

These details make some buy to let insurance policies attractive and others quite unattractive, depending on your individual circumstances and the property you intend to rent out. It is worth searching through the various buy to let insurance providers and making a note of the details that interest you before signing on the dotted line.

A point worth mentioning

It is worth mentioning here that some providers of buy to let insurance specify the type of tenant you can and can’t have in the house. So for example, some providers refuse to cover properties inhabited by housing association and local authority tenants, asylum seekers and refugees and even students. With this in mind it is advisable to consider the rental market you intend to target before choosing a buy to let insurance policy.