What Insurance Do I Need?
Protect Your Investment
Your buy to let property is an investment, and that’s something that you shouldn’t forget. You probably have insurance on your own home, and your buy to let shouldn’t be any different.
If you don’t insure your buy to let, could you afford financially to take care of any problems that may arise? The answer for most is probably a resounding – no.
As you aren’t legally required to insure a property that you are renting out, many landlords see it as a way to cut costs and increase their profits; but this is a mistake that can cost much more in the long run.
Understanding Landlord Insurance
The first thing that is very important be aware of, is that there is a difference between the insurance that you probably have on your home address and the ‘type’ of insurance policy that you should take out on your buy to let rental property.
Often if a landlord is misinformed and chooses a standard home insurance policy for his buy to let property, the policy isn’t likely to be valid if a claim were to be submitted. Some landlords opt for a home insurance policy rather than a landlord policy as it can be cheaper – but it’s a mistake and shouldn’t be made.
Most specialised landlord insurers offer a wide variety, and you will find that some companies offer free accidental cover. Depending upon the geography i.e. location of your property, you should also consider the benefits of including flood or storm damage cover to your policy.
So which ‘type’ Of Insurance / Policy Do You Need?
The very least that your landlord insurance policy should cover is ‘building’ insurance. If you are renting your property furnished, then ‘contents’ insurance is optional and definitely worth taking the time to consider.
Ask the question once again regarding replacement items; could you afford to replace anything that is stolen or damaged? If you have included kitchen appliances / white goods then it’s an idea to either include them in your contents insurance or take out an extended warranty at the time of purchase.
If however the property is being let as ‘unfurnished’, then there’s really no benefit from your perspective as the landlord to spend money insuring your tenants possessions; but make certain that your tenant is aware of this and suggest that they take out their own policy to cover contents.
The overall safety of your property is your responsibility i.e. your buy to let must be safe for your tenants. If your tenant or a visitor to your property should be unfortunate enough to suffer and injury as a result of a fault, then you as the landlord are liable. So liability cover is something that you should certainly consider.
There is also another ‘type’ of cover, often referred to as ‘loss of rent’ or ‘rent guarantee’; which can be added to your policy, but you should expect to pay a higher monthly/ annual premium for it.
Apartments and Flats
If your buy to let is leasehold an apartment or a flat, then buildings content is often included in your monthly management fee, but don’t take this for granted – check.
Getting the Best Price
As with any ‘type’ of insurance, you can get a quote online from many of the big name companies using price comparison websites, but be aware that some of the specialist companies may not appear in the search results, so it’s worth being thorough when searching.