14^th May 2018

The safest way for a landlord to protect their property, their tenants and most importantly themselves is by 'investing' in the most suitable landlords' insurance scheme. This of course is different to a standard home insurance which in most cases will not cover any claims for a buy-to-let property, leaving the property, tenants and the landlord at risk.

New research from a Landlords Insurance company claims that a quarter of UK residential landlords have chosen the wrong insurance scheme believing that a standard home buildings and contents insurance policy will be adequate protection.

Tom Cooper, the director of underwriting at the Insurance Company said that it is of the utmost importance that landlords must understand that renting out a 'home' is deemed as a business and therefore a simple home insurance and contents policy will leave them exposed to the risk of tenants taking out injury claims against them personally, if the wrong insurance is chosen.

Cooper said: “Those who have bought a home policy clearly want to protect their investments but have unfortunately mis-bought a policy that doesn’t give them the protection they need.

“A home insurance policy will not cover you for loss of rent, it will not cover you for legal fees in the event you need to pursue an eviction, and it may altogether void any claims you have to make. Any property is going to be the biggest investment you make – and not protecting that properly could cost you dearly.”

From the company's research it found that 3.5% of landlords who took part in the survey said they had not bothered with taking out any form of insurance, 4% did not know whether they had insurance, however 41% stated that they had 'invested' in a specialist landlord cover policy.

25% of landlords could reduce their insurance bills because they had purchased both a standard home and contents policy and a separate specialist landlord policy, as the landlord cover will protect buildings common to both the rented and home owned properties.

The most common reason for landlords to choose a policy was, unsurprisingly, price at 86%, closely followed by good specialist cover - 85% and third was extra additional cover such as tenants 'malicious' damage and home emergency - 70%.

Cooper also said: “High quality insurance, at the right level for your personal risk can help free landlords to diversify their strategies and think differently about how, when and where they invest.

“Whatever the reason, landlords - especially those with growing portfolios - are put off by the complication of moving their insurance. But it’s always worth shopping around to get the right cover at the best price, and the burden of administration is usually taken on by the insurer.

“Even if you’re not swapping, you should never accept an unjustified hike in price. Unless something has changed significantly at your property or you’ve had a major claim, year on year you shouldn’t be seeing your premium go up by more than about 5%.”

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