You've invested money into a safe and profitable area – the UK Housing Market – and you are now a landlord. Normal home insurance is not available for a let property and so you need a specialist contract – why?
First things first, most standard home insurance contracts will not allow the property to be occupied by anybody other than you and your family. So that's an important point – it's just unacceptable to a lot of home insurances. Perhaps obvious but I've included this point as it's fairly fundamental.
The second thing to understand is that not all tenanted properties are acceptable to all landlords' insurance products. Most of them will be fine if your tenants are professional but many will not be fine if the tenants are students or DSS referrals. However, specialist contracts can be arranged.
The main difference, between insuring a home when it's owner occupied and when it's let to others, is the increased potential of liability. If a family member trips over a dodgy floorboard and falls down the stairs, they are not as likely to sue you as a tenant would be. Understanding that you are covered for Property Owners Liability is therefore crucial.
Another potentially large loss for landlords is Loss of Rent. This is where an incident has caused the property to become uninhabitable – let's say fire, so we know it's an insurable incident, the property is being put back to it was in before the fire but it's just taking time. Your tenants have had to move out so you're not receiving rent but your mortgage still has to be paid, leaving you out of pocket. Loss of Rent will cover you for this potential loss.
Lastly, what if your tenants are unscrupulous and alter the property without seeking your authorisation (or simply damaging the property)? Although it eats into your profits if employing an agent, agents can potentially mitigate this issue, but unfortunately it can happen anyway – sometimes causing huge losses.
We helped one landlord and here is what they said:
"I am a pensioner who has had insurances via Sutton Winson before and the people I have dealt with have always been very helpful.
Today, I spoke to Chris Roberts, someone new to me, and I was very impressed with the way Chris dealt with my queries as I was unclear about the way forward on Landlord's insurance and insurance when the house is unoccupied between tenants.
He was extremely helpful, efficient and clear in his explanations, not always easy on insurance matters to someone not in the business. I have also asked him to look into some other insurances for me and look forward to dealing with him in the future."