Getting the best deal on your buy to let insurance is very important but it is not only the price you pay for your insurance that represents a great deal you also need to be sure that the policy is suitable for your needs and offers you the best possible protection for your buy to let investment.
In recent years the buy to let property owners market has expanded rapidly, with many people choosing the property market as both a long term investment and also as a regular income source. The property you buy, whether it’s a single property or 50 properties represents a significant investment and asset to landlords and it is vital that you have the right sort of insurance in place. Buy to let property owners insurance has developed well to meet the needs of landlords.
What sort of insurance do I need for a buy to let property?
It is important to recognise the risks you face in the event of significant damage to your property. Unlike traditional home insurance there are other aspects to your buy to let property that need careful consideration with regard to the type of insurance you need.
Clearly you require insurance in respect of the building itself. As with all policies the buildings sum insured under the policy should represent the full rebuilding cost of the property. This sum insured bears no relation to the market value of the property. The insurance on the buildings protects your long term investment in the property by providing for repairs and rebuild in the event of a claim.
If the property is let as furnished, you should insure the contents for their replacement cost under the landlords contents section of the policy. If the property is damaged or the contents stolen and it is let on a furnished basis you will need to replace the contents under the terms of your lease.
Loss of Rent Insurance
One of the prime motives for purchasing the buy to let property was the regular monthly income you will receive from the policy, this maybe used to fund the buy to let mortgage or perhaps is just a part of your monthly income stream. If the property suffers a claim that makes it untenable and is unoccupied, you need this insurance in place to protect your rent receivable on the lease.
Property Owners Liability Insurance
This protects you against legal actions from third parties, including tenants, in respect of your legal liability for personal injury or property damage arising from your ownership of the property. In general, limits of indemnity vary from £1M to £10M for property owners liability insurance, most landlords are happy with the standard cover provided by their buy to let insurance package.
If you employ people within your property owning business, you will need employers liability insurance, there are exceptions to this and you can find out more about these exceptions from our main employers liability page, but in general you will be required to hold a valid policy with a limit of indemnity of at least £5M
How much does buy to let insurance cost?
Specialist property owners insurance policies for buy to let properties are extremely competitively priced these days. The price you will pay will be determined by the buildings sum insured, where the property is, the type of tenants you have and whether you have previously had any claims.
Can I insure my property under a standard household insurance policy?
This is not an option for you. Standard home insurance policies are designed for owner occupiers and are underwritten by insurers on that basis. If you do this you may well find that any claim you may have will not be met by insurers. More importantly the cover is not the cover you require in order to correctly protect your long term investment and your income from the property.
How can I purchase buy to let insurance?
We provide instant access on-line to buy to let properties with a quotation system that will provide you with a range of quotes from insurers for both single properties and small property owning portfolios. You can mix and match buy to let insurance with other property investments such as commercial property ownership. For larger portfolios or to discuss your property insurance requirements with one of our brokers, please call us directly and we shall be delighted to assist you.