What's in this guide?
What is buy to let insurance and why do I need it?
There has been growth in the buy to let market since it began back in 1996 and with the current monetary policy favouring buy to let investors this growth is predicted to continue. Buy to let insurance is a type of landlord’s insurance, designed to protect landlords against the risks associated with letting a property.
So how is buy to let house insurance different to regular home insurance?
When renting a property to a third party you will always need a different a kind of cover to that of a standard home insurance policy. Though the building itself is covered on both types of insurance policy, additional aspects such as loss of rent cover can be applied; these give you more financial security if something were to go wrong. All in all, the cover is designed to protect both your material assets and your investment.
Types of tenant
When you let a property, you will always hope for tenants who are responsible and take will care of the building as you would. Tenants however, come in many different forms and some may seem more risky than others. We recommend a vetting process as a means of ensuring your tenants are suitable for the property, it’s certainly worthwhile for your peace of mind. Below are some of the types of tenant you might come across:
- Professional Let – A working tenant or tenants, this can be an individual, a couple, a group of young professionals or a family. The main factor is they earn a living and therefore pay the rent themselves.
- Students – Less rental properties are likely to accept students but they are appealing as you can often have more people per property paying rent. Students are often associated with a higher risk but also a higher reward.
- DSS – DSS stands for Department of Social Security also known as LHA or Local Housing Authority. It is used to describe tenants whose rent is paid for through housing benefits from the local council. Again, these tenants will find fewer rental properties which accept them.
- Family lets – It’s important to have a tenancy agreement in place even if you are letting to family especially if you are charging rent. Some insurers may accept cover without a tenancy agreement if letting to families and no rent is charged.
Towergate’s buy to let property insurance can cater for all the tenants listed above and if you have any questions, just ask one of the team.
Depending on your situation you may want to add more cover depending on what you feel is applicable to you. We therefore provide you a few extra options that are definitely worth considering.
Contents – So what is contents if you’re a landlord? This will mainly apply if you rent a furnished property. Items such as sofas, lamps, televisions that you have provided for your tenants should all be insured if they belong to you. What you won’t need to cover are any contents that belong to your tenants. As it is their own contents it is their own responsibility to insure it, so that’s one less thing to worry about.
Accidental damage cover – This is a biggie in terms of the potential cost of a claim. Legal cover is most important if you let the property out personally, as there is no agency between you and the client. That’s not to say you shouldn’t take out the cover either way. Legal costs can be claimed if your tenants take you to court and you need representation.
Theft and malicious damage by tenants– We hope this never happens but it’s something you can’t rule out. If your tenants do intentionally cause damage to your property, this cover will reimburse you the cost of repair or replacement.
Can we help you with anything else?
As one of the largest insurance intermediaries in Europe, Towergate offer a huge range of specialist insurance products. In the business sector alone we offer insurance for; various types of liability, specialist properties and commercial properties.
In addition we have a large range of specialist personal products such as standard home, boat and caravan cover.
Plus, if you run your own business, you can get expert business insurance from our specialist SME team. From tradesmen to beauty therapists, get in touch with them today to see how they can help protect your business. Visit our business pages for more information.
Visit our dedicated Landlords Insurance page
Tel: 0344 346 0409
Write to us:
141/145 Station Road East
Having the right insurance for your buy-to-let or rented out ~property is vital Read our guide here: https://t.co/QnuAo0aJwM— Towergate Insurance (@Towergate) March 18, 2016