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Insurance For Let Properties – Are You Really Insured?
Date Added 24/11/2008
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This is an area often overlooked by Landlords when they decide to let a property. We regularly advise our Landlords that the overall risks associated with letting a property are significantly different to owner occupied properties and recommend that any property insurance is taken out with an insurer who is specialised in the lettings sector.
Most Landlords are unaware that a standard ‘owner-occupied’ insurance policy may not provide adequate cover if the property is let, and they should also check all policy wording to see if the insurance is valid.
It is important that the property is adequately insured, with the sum insured representing the true cost to rebuild the property and not the current market valuation. In may cases property owners will under value the true re-build cost and this will result in the insurer not paying the full amount of the claim to re-build. It is recommend that Landlords obtain a professional re-build cost calculated by a qualified surveyor or speak to the insurer for further advice.
It is also important that a Landlord obtains written consent from their mortgage lender, existing insurer and head lease (if a leasehold property). Failure to obtain written consent from these parties may also render their insurance void in the event of a claim.
The type of tenant should also be considered, as many insurers will not provide cover if the tenant is considered high risk. These include tenants in receipt of State benefit, students or multiple single sharers.
Landlords should also check that any contents policy provides cover in relation to both Employers Liability and Landlords Liability. This cover will protect the Landlord from compensation claims such as injuries to tenants or guests caused by defective cookers, light fittings or loose carpets. We strongly that all Landlords take both minimum contents and liability cover.
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