My landlord insurance fell due at the beginning of this month. DAMMM!
Yet again the dilemma.
To just renew or to go on the hunt for a better rate.
There is no doubt that if you are prepared to hunt around you will get a better deal on your landlord insurance. Before you start the hunt there are some essential things that you should look for in your landlord insurance cover.
Things to look out for…..
Firstly, there are two aspects to landlord insurance.
The building insurance, in other words the structure. This covers you for the rebuilding costs of your property should any disaster strike. This will depend largely on the geographical location and the type of building. To calculate your rebuilding costs have a look at the BICS Calculator.
Secondly, the contents insurance which covers you against damage to the fixtures and fittings or the contents of your property.
Not all policies are the same.
Some landlord insurance includes a significant amount of cover for your fixtures and fittings. This negates the need for most landlords to take out separate contents cover. Some policies even automatically include damage to white goods such as hobs and fridges. Other policies such as some of the ones provided by Alan Boswell will also automatically include carpet and curtains cover.
Another key consideration on your policy details is the amount of excess the insurance policy specifies within its’ cover. A standard excess is usually 100 pounds. Some policies allow you to increase the voluntary excess. This will bring down your premium.
Fixtures and fittings should the tenant pay?
Insurance cover of the contents and fixtures. A fitting is a moot point for many landlords. Say a tenant cracks the sanitary ware. Who pays? Well if it’s the tenants fault which it’s probably going to be it really should be them. However, here’s the problem, many tenants remain uninsured. This means that unless the landlord stipulates that the tenant has contents insurance prior to the tenancy commencing they can find that they are in line to pick up the tab. The other option open to the landlord is to claim against the tenants deposit. What are the chances of succeeding?
Landlords will be aware that under s11(b) Landlord and Tenant Act 1987, the landlord has an obligation to keep sanitary ware in repair. However, just because the landlord is under a legal duty to repair the accidental damage, it doesn't mean it isn't chargeable to the tenant. If the landlord can show that damage in excess of normal wear and tear occurred during the tenancy, they should be able to claim for a contribution from the tenants deposit towards the cost of repair. However, Tom Derrett principal of ADR Solution an expert on tenany deposit disputes comments:
“The landlords chances of getting anything like the cost of repair are very small. “
“If they have a comprehensive inventory from the beginning of the tenancy that actually documents the condition of the toilet in sufficient detail and a correspondingly detailed check-out report, and they have evidence as to the cost of repairing the damage, their chances of recovering a contribution towards the repair are reasonable. The award, however, is likely to be a fraction of the actual cost to the landlord because of the way the deposit protection schemes interpret and apply the principle of betterment.”
“If they don't have sufficient evidence, their chances of receiving anything more than a nominal amount are virtually nil unless the tenant agrees to it.”
The best option is therefore for a landlord to select a policy that covers them against accidental damage to sanitary ware.
Landlord insurance won’t protect you from bad tenants
One thing that all landlords should be aware of is that landlord insurance won’t protect you from damage to your property caused by your tenants. This is because all policies include a clause that excludes damage caused to a property where there is no sign of forcible entry. This just reinforces the need to ensure that you reference your tenants properly to ensure that they are trustworthy.
So what did I do?
As we all know being a busy landlord it’s often a case of time vs money.
My existing policy was with Alan Boswell a company that I’ve used for many years since starting out in the buy-to-let business. I’m sure they aren’t the absolute cheapest. From time to time if I’ve had the capacity I would hunt around on the Internet and maybe shave 5-10% of the quote. This time I’ve really just not had the time. However, I’m reasonably comfortable that they are competitive and that their level of cover is pretty good. In the past when I have had to claim I’ve already found them easy to deal with. Given that the premium stayed pretty constant from last year I phoned them up and just paid with my credit card. Job done. One less thing to do on my burgeoning to do list!
Next year I will do it properly…..maybe…..