Landlord insurance: Finding the right cover
Earlier this week Frank Webster, Vice Chairman, joined Lesley Gordon from Jelf Insurance Brokers Ltd on Kat Orman’s BBC Radio Oxford show to share their expertise on the issues surrounding insurance for rental properties.
As many will remember, the floods that occurred during the summer of 2007 as well as more recently and the resultant damage to a vast number of homes and businesses throughout Oxfordshire illustrate the importance of having an insurance policy which provides sufficient cover. Despite landlord insurance not being a legal requirement, the increased risks associated with renting out a property mean that it is vital in providing a wide safety net to protect your property, tenants and future income.
Firstly, it is important to note that liability for any damage caused to a property following an event lies with the landlord as opposed to the tenant. Unlike owner occupier insurance, a good comprehensive landlord’s policy not only provides buildings and contents cover but also would include owner’s liability and third party, loss of income caused by the property being unoccupied as a result of that damage, emergency assistance, legal expenses and also rent guarantee cover.
Whilst there are various companies offering landlord insurance at an array of prices, it is wise to not proceed with the cheapest quote without carefully studying the level of protection that is being offered. Each premium will be different in accordance to a number of factors including the rebuild costs, the value of the contents inside, the age of the property and the proximity to potential hazards. Lastly, if the property is located in an area where flooding has been a problem in the past, for example either the Abingdon or Botley Roads, it is possible that one would not be able to attain a policy with any company other than the one with whom your existing policy is with. In such a case, the landlord would be best advised to remain with the company who is providing the flood cover.
In short, renting out what is possibly your biggest investment carries a number of risks. It is therefore easy to understand why adopting a landlord specific policy to absorb any unexpected future costs should disaster strike is strongly recommended.