Wednesday, 6 November 2013


 
It's valuable, insure it properly then you can relax !
 
 
Yes I know, insurance, possibly one of life's less interesting subjects (apols to insurance professionals everywhere). And yes, I know most landlords can't afford a yacht like the chap above but I thought it was a nice picture and he does look relaxed.
 
I've been in the lettings industry 17 years as both an agent and a buy to let landlord and have seen examples of why it is so important to get insurance right. If you're a landlord you're trying to protect your investment, possibly the single biggest investment you've made. If you're a tenant, you're protecting your belongings - think about the replacement cost of just your gadgets and then consider that mountain bike, those designer shoes etc. You should always seek professional advice from an FCA regulated advisor/broker when you buy insurance www.fca.org.uk - the FCA (Financial Conduct Authority) recently replaced the old FSA.
 
Don't make the mistake of thinking any old policy purchased from some price comparison website is necessarily going to be all you need either. Let property is different to your own residential dwelling. Cheap to buy may mean inadequate cover - it is an irrefutable rule of life that you get what you pay for - by all means seek out a good deal but take the time to check the level of cover very carefully.
 
So why is insurance in let properties different? Let's (no pun intended) start with landlords. Over and above normal cover you need to protect yourself against loss of rent in the event the house becomes uninhabitable to your tenants and they're forced to move out, alternative accommodation for you and your family should you try to move into your property and the tenants won't leave, accidental and malicious damage to the property by the tenants or their guests and public liability in case someone is injured at your property. And there are complications within this - public liability for instance may lie within the buildings cover or within the contents cover. You should check and ensure you have it - how many landlords do you know letting unfurnished property who haven't bothered with contents cover thinking they don't need it?
 
Tenants should consider taking out a policy that protects them in case of accidental damage to the landlords property whether that's by them or their guests - most tenants have several hundred pounds tied up in a damage deposit and they'll want to protect it - accidents can happen and wine can be spilled on carpets no matter how careful or thoughtful a tenant you are.
 
You'll have noticed that accidental or malicious damage has been mentioned under both landlords and tenants insurance - if one has it why should the other party need it? The answer is that you should never rely on 'another persons insured position'. So tenants will know that the landlord is responsible for insuring the building and his own contents but not the tenants belongings. Make sure you're covered.
 
Finally for landlords, what's the point of the right mortgage/funding, the right property, the right agent, the right tenants, the right management, the right accountant etc only to lose out because you didn't check your insurance or you opted to save £50 a year on a cheap policy - landlords have by far the most to lose by getting insurance wrong and should put some work into this part of their business (even if it isn't the most sexy subject under the sun). And of course, for landlords their insurance premium is a tax deductible expense of the lettings business.

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