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Property Owners' and Landlord Insurance

Published by System Admin at 10/22/2019, 10:00:00 AM

HousesFrom multi-million-pound portfolios to single properties rented out, it is important to make sure your investment is properly protected in the event of a claim.

Often it is very tempting to take up a mortgage provider on their offer of providing cover but these policies rarely give value for money. Alternatively, it can be tempting to look on a comparison website to get a quick policy so that the solicitors can tick that box - again, if you don't understand the cover you are purchasing it can make a claim a much more memorable experience for all the wrong reasons.

Property Owners' insurance is one of the most competitive lines of business and as a result if you haven't in the last few years it is definitely worthwhile shopping around to see what is available to you.

A Property Owners' policy will include cover for the building itself, and in addition can cover landlord's contents, potential legal expenses, and any loss of rent you suffer as the result of a claim on the property element of the policy.

Not all policies are the same and it is vital to check a policy's exclusions carefully.

One of the most important areas that should be checked before taking out a policy is the unoccupancy conditions on the policy. A lot of insurers will restrict cover from an "all risks" basis to Fire, Lightning, Explosion, Aircraft ("FLEA") only as soon as a property becomes untenanted. This literally means they will only pay out a claim that occurs as a result of one of these four perils.

Unless you are certain the property will not become unoccupied over the course of the year this would leave you exposed in the event of a common loss such as storm damage or flood whilst in between tenants. Clearly finding cover that has more flexibility than this is vital to protect your properties. We have access to several insurers that give full cover whilst a property is unoccupied and we regularly enhance a customer's cover without increasing their premiums.

BuildingAnother common exclusion from basic property owners' policies is the illegal cultivation of drugs by a tenant. This is frighteningly common in residential let properties; however, it is not exclusive to them and I have handled a claim in excess of £40,000 in the recent past for a warehouse that was converted into a cannabis farm by a tenant. Luckily for our client in this scenario they were covered on a policy which did not exclude the peril, otherwise they would have had a very unfortunate and very high bill to put right all of the damage caused to the building by the tenant's "adaptations".

Fires are extremely common where tenants have set up cannabis-farming operations due to the number of heaters used, the strain placed on the electrical system without adequate precaution, and the target placed on the property by local "competition". Despite this people still often see it as an easy way to make money and we continue to see it happen. All that we can do is continue make sure our customers are insured in the event this happens to them, and recommend on risk management measures, for example three- or six-monthly inspections of residential let properties.

If you have a large portfolio of properties then it could be that you actually lose track of them all and could at some point realise you have forgotten to notify your insurer of a new house. Fortunately for you it is also entirely possible to have an extension on your policy for new purchases that have inadvertently not been notified - if this is of interest make sure that you review any quotes before agreeing to go ahead with the cheapest option.

We have access to a large number of insurers who can offer a bespoke policy to fit your requirements - and it can be done without paying over the odds.

If you would like assistance reviewing your current policy feel free to get in touch.