Sep 12

What are the most important types of cover a landlord should take as a minimum?

First and foremost landlords should ensure that the policy they purchase is specifically designed for landlords rather than a standard home insurance policy. From there the essential covers to consider are fire, flood, storm damage public/property owners’ liability.   This would effectively cover all catastrophes that might significantly affect your property.

However, landlords should bear in mind that with so many issues that could affect their property business, only taking the minimum cover could have major financial implications in the event of a claim.

In recent years we have seen a significant rise in malicious damage claims caused by the tenant.  Such claims can be expensive to rectify but depending on the amount of damage caused it can also take many months to reinstate the property to a tenantable condition. The majority of standard insurance policies exclude cover for malicious damage by the tenants, and without the right cover in place, the cost of this damage would have to be borne by the landlord.

In 2010 we experienced a 48% increase in escape of water claims as a result of the worst winter freeze on record in 31 years. Landlords should be aware that many policies will include a higher excess for this type of claim which can be as much as double the standard policy excess.  Landlords should be cautious short term savings can lead to far greater expenditure  in the long term if the cover they purchase is not right.

Many insurance companies also hold a zero tolerance policy on unoccupied properties.  This mean that if an escape of water claim occurs whilst the property is untenanted and unoccupied, without notification to insurers, the claim would not be paid and the landlord would incur the cost of repairs.

Whilst we appreciate that price is an important factor during these financially difficult times, we would strongly recommend that landlords fully understand the policy they are looking to purchase, as a short term gain, could lead to long term financial pain.

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