Posted 26/10/2016
With the number of first time landlords on the rise, it has never been so important to make sure you are fully covered.
There are a number of risks when buying a property to be let and here at Drayton Insurance we hear a range of different concerns from landlords every day. Therefore, we have compiled this handy guide answering a range of questions you may have as a landlord and (hopefully!) making the insurance side of things a little bit more simple.
What is covered under Buildings?
- Simply, it covers all the bricks and mortar together with anything which is fixed and bolted to the building such as a fitted kitchen or bathroom together with any outbuildings including garages, sheds, fences and walls.
What is the Sum Insured?
- The Sum Insured is what you have confirmed to the insurer that in the event of a total loss is the amount it would cost to rebuild the property. This is why we will ask from you what the rebuild value of the property is. This includes clearance fees, costs of submitting planning permission, any architect or solicitor fees, to the first brick and the last tile on the roof.
- Index Linking is applied at renewal by insurers to the Building Sum Insured. This increases the Building Sum Insured by a calculated percentage to coincide with costs such as inflation and material increases. This is there to lower the risk of your property becoming underinsured. If it is found that your Building Sum Insured is not adequate and it less than what is required, the insurers will deduction the percentage you are underinsured by to the claim total.
What is classed as Contents?
- If you were to pick up your property and shake it, whatever was to move around would be contents, this includes carpets, curtains and white goods. However, this only covers the contents you leave in there as a Landlords and the tenants would have to arrange separate cover for their own contents.
- If you own a leasehold flat, typically you would only need to cover for contents as the Buildings Insurance would be arranged by the freeholder, part of the costs you pay towards with your Service Charge.
What Is Loss of Rent?
- This provides cover for loss of rent or the costs of alternative accommodation of a tenant in the event of an insured peril such as Fire, Flood or Escape of Water making the property inhabitable until it is fit to be occupied again.
- It does not cover tenants defaulting on their rent, this is not considered an insured peril. There are Rent Guarantee policies however that would cover this eventuality.
Why is Property Owners Liability so important?
- This provides cover for any Third Party Property Damage or Injury (including the Tenant) of which you are found negligent for, whether as a freeholder or leaseholder. However, It is up to the claimant to prove your negligence not for you to prove your innocence.
What happens if my property becomes vacant?
- When a property become vacant, cover is restricted to Fire, Lightning, Earthquake, Explosion and Aircraft until it is occupied with a replacement tenant. A Property is deemed unoccupied once it has been vacant for a set number of consecutive days, this varies from insurer to insurer but is typically anything from 30 to 90 days.
We hope we’ve answered any questions you had. However, as one of the Eastern Landlords Associations’ recommended brokers, we have a dedicated Landlords team on hand to help. Please give our team a call today on 01603 954054. Or why not tweet us? You can find us @Draytonins
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