Tag Archives: insurance for landlords

Tenant versus landlord – legal battles

September 30, 2012

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A recent story* has highlighted again the sometimes fragile nature of the relationship between tenant and landlord.

In this case, the story has made national headlines due to the fact that a sporting celebrity is involved and is being sued by the landlords concerned.

No particular comment is possible on the respective positions of this case which will, no doubt, be decided by the courts in due course.

What is interesting about this is that it again indicates the age old question of what insurance for landlords is desirable?

For example, not all policies provide cover for malicious damage by tenants.  Equally, some may not offer cover for furnishings or possessions stolen or as the defendant is claiming in this case, accidentally removed or damaged etc.

Then there is the question of rental losses.  Some policies may offer no assistance at all in situations where tenants flee leaving large amounts of unpaid arrears. Others might offer some assistance in legal actions relating to the recovery of sums where the tenant’s current whereabouts are at least known.

You may find that some insurance might offer some contributions towards the cost of defending yourself in legal actions if you are sued for third party liability type damages but cover for legal costs associated with evicting tenants may not be included.

The bottom line here is that the level and nature of the cover you require might be influenced very heavily by the nature of your business.  Given that no two landlords will be identical, it means that it is difficult for anyone to provide very specific advice, in general, as to what insurance landlords might require.

The only solution to this is to look carefully at the nature of your properties and how you are letting them.  You then need to decide the specific risks you believe you are exposed to and just how important it is for you to have cover for them.

Then it becomes a question of matching your requirements against suitable policies.

Needless to say, this reemphasises the importance of reading a policy and its cover provisions very carefully before deciding whether or not it is going to be suitable for you.

 *Source:

http://www.thesun.co.uk/sol/homepage/news/4442678/QPRs-Anton-Ferdinand-sued-for-18000-after-claims-he-left-luxury-flat-in-trashed-state.html

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All about cheap insurance for landlords

April 19, 2012

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It may not be too unusual to see advertisements for cheap insurance for landlords.

Attractive they may be, yet it may be advisable to keep a few points in mind.

Landlord insurance – not just a cost

Try to keep in mind when looking at these sort of advertisements that while you may regard your landlord cover to be nothing more than a cost in fact, it is perhaps more important to remember that it is there as a protection.

Your objective, as a landlord, should be to consider your insurance as something that is a form of financial protection for your business should the worst happen in property terms.

In the event that it did, your business focus would most certainly not be on how much you have been paying for your policy over the years but rather how quickly and adequately it could step in to assist you.

Implications

This might indicate that reviewing your policy choices based upon one criterion (cost) but potentially eventually needing to use your policy against other criteria altogether (breadth and depth of cover) might be inconsistent.

It may be rather more sensible to review a buy to let insurance quote based not upon its claims or otherwise of cheapness but instead upon the quality of cover it is providing.

If you don’t adopt an approach to evaluating insurance that is broad-based, you may run the risk, in the context of an insurance claim, of discovering the old truth that what may have appeared cheap for someone else has not worked out to be cheap for you.

Advertising licence

It might also pay to remember that headline prices quoted in advertisements may be based upon illustrative circumstances that might simply not apply in all cases and possibly not in yours.

In the final analysis, the only way to be sure about the price you may end up paying for your cover, is to go through the full quotation process.

So, whilst cheap insurance for landlords may be an understandable objective to think about, it might be advisable to focus a little more strongly on the practicalities of what your money will be buying you.

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The attractions and risks of cheap insurance for landlords

March 7, 2012

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The attractions of apparently cheap insurance for landlords may be very clear.

Yet what may also need to be taken into account are the risks associated with pursuing a search for landlords insurance exclusively on the basis of the cheapest price you can find.

Your asset

You probably do not need to be told that property almost invariably constitutes a major investment of a landlord’s capital and protecting it may be of paramount importance.

Your asset may be vulnerable to any one of a number of potential problems, some of which may bring with them serious financial implications.

It may not be too much of an exaggeration to say that if you are unfortunate where property is concerned and your misfortune is combined with inadequate insurance cover, the financial costs may prove to be quite literally ruinous to you and your family.

The protection of let property insurance

This is why this type of cover exists.

Yet in one sense, there is no one such thing as landlords cover insurance because each individual policy will typically provide slightly different levels of cover governed by slightly different terms and conditions.

For example, it may no longer be safe to assume that your landlords buildings insurance will automatically cover risks relating to subsidence.  Some policies may, others may not.

Given that serious subsidence may lead to horrendous costs, including potentially the demolition of your property and its complete rebuilding, you may wish to ask yourself how comfortable you would be, knowing that this risk was not covered by your policy.

A healthy balance

That is why what is cheap insurance for one landlord might prove to be exactly the opposite for you.

It also indicates the potential dangers of selecting your insurance exclusively based on the advertised price.

You may be very pleased that you have found what appears to be cheap insurance cover but if your property subsequently suffers severe subsidence problems and you discover this is not covered by your policy, your views on the policy’s cost-effectiveness may change drastically!

Looking for cheap insurance for landlords may be understandable and even sensible, however, it might be prudent to ensure that it was a secondary objective to that of finding appropriate cover.

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Why insurance for landlords is important

December 6, 2011

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It is hopefully safe to assume that the case for having insurance on your property and contents does not need to be made.  What sometimes is questioned though is why insurance for landlords is necessary, as opposed to standard owner-occupier cover:

 

  • to begin by clarifying a point on landlords – you do not need to be fully occupied, full-time in renting out property to be designated as a landlord for insurance purposes, in fact, even if you only rent out a room of two in your property during the holiday season then you will have become a landlord;

 

  • if you are renting out property or even a small part of your own property, you are effectively using it for commercial purposes and income generation;

 

  • owner-occupier home buildings and contents insurance is designed to cover the risks typically associated with domestic use of a property and not those that may be associated with commercial use – i.e. renting;

 

  • insurers typically regard a property that is being used for purposes of income generation through rental, as being at higher risk, in certain categories, than a property being used exclusively for domestic purposes;

 

  • as a result, owner-occupier policies will typically become invalid if you start to use your property for rental purposes;

 

  • insurance for landlords is the appropriate cover for landlord purposes – in fact, if you have a buy-to-let mortgage, your lender may insist on its use to protect the building they have advanced money against;

 

  • there are variations in the cover provided by typical landlords insurance policies and it may be advisable to look at a number of options before deciding what is the best landlord insurance for you;

 

  • remember that in the event of taking out a policy or making an insurance claim, if you intentionally misrepresent the occupancy status of your property, the consequences may be significant – including the rejection of your claim, your listing as someone who makes false declarations and in some cases, your action may result in a prosecutable offence;

 

  • given that the total amount of money that you have invested in your property and business, looking for appropriate insurance for landlords appears to be only commonsense.
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Some top tips for landlord insurance

November 26, 2011

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If you are thinking about landlord insurance, you may find the following points useful;

 

  • do not be misled into thinking that you will be able to get by with owner-occupier home buildings and contents insurance cover – that form of property and contents insurance typically becomes invalid (or is inapplicable to begin with) the moment you start to obtain rental income from any property you own;

 

  • do your research thoroughly and look at a number of options for landlord insurance – policies and the cover they provide may differ significantly from one to another and not all may be equally suitable for your particular situation;

 

  • if you have several properties that you currently use to generate rental income, consider a property portfolio insurance option – it may be possible to cover your properties on one multi-property policy and this may lead to benefits in terms of cost-effectiveness and administrative simplicity;

 

  • look carefully at the policy’s added cover benefits – you may be able to anticipate that a policy will typically cover buildings, contents and third party liability, however, some policies may also offer additional cover in areas such as the loss of rental income that may arise should your tenants be forced to move out of your property whilst you undertake repairs etc;

 

  • periodically review your cover – both your situation as a landlord and the market position with respect to available options may change over time, therefore, it may make sense to periodically sit down and review any existing cover you may have against alternative options;

 

  • recognise that unoccupied property is different – typical standard insurance for landlords may not provide cover for properties that sit unoccupied for periods greater than 30-90 days (variable by policy and circumstances), so, if you think your property may become unoccupied for an extended period, you may wish to investigate what is called unoccupied property insurance;

 

  • remember to comply with legislation – a landlord insurance policy may typically require that your property conforms to all prevailing local and national safety regulations (e.g. gas inspection laws for rental properties) and if you fail to do so, you may put your insurance cover at risk.
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