Do you need landlords contents insurance?

November 14, 2012

Landlords Insurance

You may take the view that since your buy to let property is to be occupied by tenants that there is likely to be little in the way of any contents that you own. Even if you are letting the premises as unfurnished, however, you may be surprised by how much the value of even minimal contents – in common areas such as corridors and hallways, for example – may mount up.

A furnished or semi-furnished property, of course, is likely to contain even more of your property of value – what is likely to be involved in insuring those contents, therefore?

  • as you may have done with your own home, of course, a detailed inventory of the contents may help you arrive at the total sum for which you may wish to arrange such cover;
  • when compiling your inventory, you may also want to make a note of the age of each item, its condition, and the original purchase price (or estimate of its current value);
  • one of the reasons for keeping such details is because of the way in which your landlords contents insurance may base the settlement of any claims for loss or damage;
  • some policies, for example, may settle on a straight replacement value of “new for old” (allowing you to replace lost or damaged items at their current value and purchase price – other policies, however, offer settlement on the basis of the items’ original purchase price, minus an allowance for wear and tear over the years. As you may imagine, the latter type of policy typically attracts somewhat lower premiums than those offering the former, more favourable, settlement;
  • you may also wish to look carefully at the risks covered and the terms under which you may claim for any loss or damage of the insured contents – certain policies, for example, may extend cover to accidental damage (although such extensive cover is by no means common to all packages);
  • when arranging your landlord insurance, you may also want to check whether any contents insurance also covers the risk of malicious damage – whether by your tenants or others;
  • if you adopt the approach of considering insurance for your buy to let business as a whole, you may find it possible to make significant savings by combining both building insurance and contents insurance – a number of insurers offer attractive discounts if you purchase both types of cover under a single policy.

There are a number of factors which you may wish to take into account, therefore, when arranging insurance for the contents of your buy to let property – not least of which is likely to be the cost of replacing any items which may become lost or damaged.

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