Insurance For Your Investment Property

Insurance For Your Investment Property

insurance

insurance

Insurance For Your Investment Property

The lettings market has come a long way since the dark days of summary eviction, overcrowding properties, unsafe gas appliances and other hazards, there are now hundreds of regulations and safeguards – but that doesn’t mean nothing ever goes wrong.

If something does go wrong, it can be expensive. You might assume that all Landlords, who are aware of the risks, arrange insurances to protect their investment.  However, a recent study by AXA, found that one in four Landlords have the wrong insurance, opting for standard home insurance, which is unlikely to pay out if the property is tenanted.

“Landlords who have purchased the wrong insurance, 43% were reportedly unaware of the existence of Landlord cover.”

It is a mortgage condition to have insurance to cover the rebuild cost of the property but if you’re amongst the 15-20% of Landlords who are mortgage free you should still make sure you have buildings & minimal contents insurance. Mortgage companies can audit Landlords for proof of insurance. Landlords who fail to provide evidence could face termination of their mortgage or may have the insurance purchased for them with the cost being added to the mortgage plus administrative charge.

Rent guarantee and legal cover is under purchased with less than 20% of Landlords having rent protection. Maher Ross can arrange for rent protection for you through JustLandlords.

Landlords are not obliged to make a claim if they have insurance. The excess on some policies is not financially viable to claim on smaller matters, especially where any repair costs less than the excess.

Landlords insurance will not cover a tenants possessions and Landlords should advise their tenants to obtain their own contents insurance, this can be added to the tenancy agreement but please note that this cannot be compelled to do so or to buy a specific policy.

Landlords should ensure that they comply with any conditions of their insurance to ensure they do not lose their cover. Such conditions may include restrictions in respect of short / holiday lets, renting to employed tenants only and restrictions on company lets.

At Maher Ross we advise our Landlords to obtain at least landlords buildings insurance. If the property is leasehold, you’ll need to check with the freeholder what is covered with the insurance. Any policy that is purchased should be carefully considered to ensure that the right cover is in place to protect against potentially high remedial or compensation costs.

 

For any questions regarding your investment property, contact our office 01983 563000


This article is for information only and is not official guidance, FCA approved, or legally precise.