Choosing the right cover for you can create a bit of a headache. With such a competitive market place you can sometimes have 20 or 30 quotes come up in typical search. Which do you choose? Below are a few pointers to give you an idea of what to look out for.
- Check for additional fees – Some companies try to hook you in with a cheap premium but then charge large admin fees to offset the difference. Particularly if you want to may monthly. Read the small print!
- Home Insurance is not the same as Landlord Insurance – Many landlords do not realise that they need a particular insurance for buy to let property. Home insurance is designed for owner occupiers, not tenanted homes. Whilst some home insurances may cover renting a home out, most are not offering specialist cover – are you prepared to take the risk?
- Review implications of a tenant sub-letting – Some insurers are very wary of sublets. If they do accept them, they are more then likely going to want to see all the appropriate paperwork. Make sure you have a thorough assured shorthold agreement in place and associated documents. An insurer is likely to be more accepting knowing you have checked out the tenants thoroughly. Make sure you visit your property regularly, should you find it is being sublet (which typically against standard AST terms) then notify your insurer immediately as any potential claim could be denied.
- Make sure loss of rent is included – most products should offer cover of income whilst the property is uninhabitable. You might also want to include cover for the cost of alternative accommodation should something happen that means the tenant cannot reside there during the tenancy.
- Cover for malicious damage and manufacture of drugs – malicious damage by a tenant is more common that you think, check for this kind of cover, or add it as a ‘bolt on’ to your package. A Cannabis factory could lead to the destruction of property, failing to cover it could be the end of your investment.
- Check the excess! – read the policy before signing. Common claims such as water damage can have high excesses and different to advertised costs shown on the websites. Make sure you know about and agree to them before committing.
- Read the conditions of the policy – most policies will have the need for a legally biding tenancy agreement to be in place. If you let to friends and family without one, you might end up invalidating your insurance.
- Check the guidelines for serviced accommodation – with the need for AST’s to validate most policies, they don’t always cover ‘rent by the night’ property. So, check whether you need holiday let or serviced insurance instead.
- Occupancy rules – Some policies expire the moment a tenant leaves, some might continue for a specific period. Make sure you know when your policy will expire, particularly if your property becomes vacant over the winter months.
- Research – The internet is a marvellous thing. Read reviews, testimonies and industry commentaries to make the best-informed decisions.
Now you are prepared. For more information of advice, call 02476 374949 or email email@example.com.
Advisory source – Landlord Investors 40th edition