This is a guest post written by Jamie McKenzie, Account Executive and Property Specialist at Bruce Stevenson Insurance Brokers.
It is vital for any landlord that your buy-to-let property is properly insured. A let property is a major investment and specialist landlord’s insurance is essential to protect you—and your bank balance—from an unexpected incident that can lead to an insurance claim.
Many assume that a standard home and contents policy will provide the required protection in the event of a loss. Unfortunately, this is not always the case and insurers could reject a claim when they establish that the property is let rather than occupied by you. This can of course result in a landlord being out of pocket following a loss. However, this is an avoidable outcome if you have the appropriate insurance in place.
What’s covered?
It’s worthwhile looking at some of the features of a comprehensive landlord’s policy.
A key section of the policy is cover for the property itself, the bricks and mortar. This covers the cost of repairing damage to the physical structure of the building in the event of a loss. This also includes the walls, roof and permanent fixtures, such as a fitted kitchen. Landlords also have the option to include cover for contents in the property belonging to them, including items of furniture, electronic equipment, and basic furnishings.
A crucial aspect of this policy is the cover for any lost rental income should your property become uninhabitable following an insured event, such as a fire or escape of water. This section can also meet the costs of alternative accommodation, should you need to temporarily re-house your tenants whilst the property is being repaired.
Don’t overlook it….
It’s possible that your property will become unoccupied at some point in time, either for renovation or a gap between tenancies. Insurers often look to restrict cover during this unoccupied period, making it important to consider a policy that provides full cover for a longer period, such as 90 days. Also look for a policy that will not charge an extra premium for accidental damage or malicious damage or theft by tenants. A common reason for reporting a claim is an escape of water in the property, so consider a policy that has not only a low excess for this type of loss but also includes ‘trace and access’ cover as standard. This will cover the cost of locating the source of a leak, which might be a burst pipe under floorboards or behind sealed bathroom tiles.
Getting the numbers right
It’s the landlord’s responsibility to ensure that the ‘sums insured’ on the policy are adequate and remain so, which means it is important to have your property professionally surveyed for an accurate valuation of the ‘reinstatement’ value of your building. This is the total cost of completely rebuilding the property if it was destroyed beyond repair. Thus, in the event of a major disaster such as a fire, you will be suitably covered without incurring a reduction in the claim payment due to the property being underinsured, known as the ‘average’ clause.
In safe hands
In the event that you do need to report a claim, it’s essential for all parties that the claim is handled quickly, efficiently and fairly. It's important to have a provider who values the importance of their claims service or a broker that has delegated authority to handle claims in-house.
Bruce Stevenson have enjoyed a long-standing partnership with Rettie and we can provide a specialist landlord’s insurance policy that includes all the above features. If you would like a quotation to join Rettie’s block policy arrangement, which offers many benefits including preferential rates and enhanced cover, please contact Euan Chalmers on 0131 561 2450 or Euan.Chalmers@BruceStevenson.co.uk