What is let property insurance?

November 5, 2011

Landlords Insurance

Property owners typically wish to put in place some form of financial protection to cover the risk of their asset suffering various types of mishap that result in financial loss.  If that property is one that you use for the purposes of income generation through rental, then let property insurance may be required to provide such protection.

 

Although you may not immediately consider yourself to be such, the reality of life is that if you rent out a property or even part of your own dwelling, then by definition, you are a landlord.

 

The insurance industry typically sees the risks associated with rented property to be different to those that may apply in the case of a property that is owner-occupied.  There are, therefore, insurance policies designed to deal with those risks and those policies provide what is commonly called let property insurance (or landlords insurance).

 

Such policies typically provide cover that appears to be very familiar:

 

  • landlords buildings insurance – essentially covering the bricks and mortar side of your property;

 

  • landlords contents insurance – doing the same thing for the movables within your property although, of course, if you rent out on an unfurnished basis, you may not necessarily need this component of cover;

 

  • landlords third party liability cover – important in situations where either your tenants or a member of the public (e.g. one of the tenants’ visitors) suffers an injury that a court subsequently attributes as being due to your negligence or poor maintenance of the property etc.

 

Yet letting insurance may also provide a range of additional cover that reflects at least some of the special circumstances that a landlord may face including things such as:

 

  • a loss of rental income arising from your tenants being forced to vacate the property due to an insured risk;

 

  • discounts that may apply in situations where you have a property portfolio of several properties to insure;

 

  • malicious damage by tenants.

 

It may be advisable to keep in mind that if you have a buy to let mortgage, your mortgage provider may have inserted a clause into the contract requiring that your property is adequately insured at all times, so as to protect their interests as well as your own.

 

As a result, let property insurance may be virtually obligatory under the terms of your mortgage agreement.

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