Arranging landlords buildings insurance cover

November 26, 2012

Landlords Insurance

When setting up your buy to let business, it is almost certain that your greatest investment lay in the purchase of the property itself. Given the probable scale of such an investment, you are just as likely to want to do all that you to safeguard it by protecting the structure and fabric of the building against loss or damage – caused by such potentially major risks as flooding, fire, impacts, storm damage or vandalism.

Because it may safeguard the very core of a buy to let business, therefore, landlords buildings insurance cover typically forms a central part of landlords insurance.

Indeed, if a mortgage is involved in your purchase of the property, the lender is likely to be just as interested in safeguarding what is invariably a considerable sum by insisting that sufficient cover is in place as a condition of the loan.

What’s covered?

Both you and any mortgage lender, therefore, are likely to share a concern for exactly what risks are covered. Here, it may be important to bear in mind that not all policies offer the same degree of protection.

You may find, for example, that some insurers specifically exclude the risk of subsidence. Any major disturbance or subsidence of the building’s foundations, of course, might lead to considerable problems and major expense in putting things right

For extra peace of mind, therefore, you may wish to consider only those selected policies that are available (from specialist providers such as ourselves) and offer “all risks” protection, including the risk of subsidence.

You may also wish to check whether your chosen policy also covers the risk of malicious damage – whether this is caused by your own tenants or others.

How much to insure?

As may be clear from the description of some of the risks, building insurance is typically intended to cover incidents up to and including the total loss of the property (following a devastating fire, for example) and the subsequent need for its complete reconstruction.

This is the basis, therefore, on which owners typically base the amount of the total sum insured – the cost of rebuilding the property in a worst case scenario. Thus, if the total sum insured is an under-estimate (you are under-insured), there may not be a big enough settlement to rebuild the property; but if you are over-insured, you are likely to be paying more than rebuilding costs require in the event of a claim.

If you are concerned about any aspect of arranging adequate building insurance for your buy to let property, then please feel free to get in touch. At CIA Insurance we will be more than happy to help!

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