How to buy the best landlord insurance cover. Sound advice from the Association of British Insurers

Buy to let landlords should ignore the myths about insurance and make sure they have the best cover at the best price, says the Association of British Insurers (ABI).

Property investors and homeowners spend billions every year or buildings and contents cover, often without understanding the terms and conditions of their polices.

The latest figures for property insurance show premiums totalled £8.8 billion in 2008.

Maggie Craig, the ABI’s acting director general, said: “In the current economic climate, it is even more important people are not under-insured or put off getting vital cover because they don’t understand how insurance works.”

She went on to reveal the five most misunderstood points about property insurance:

1. Keeping your insurer in the loopDisclosing any changes that might affect insurance cover is paramount. Holding back is a false economy if it means a claim is rejected. If in doubt, always tell your insurer.
2. Checking your valuationsProperty is insured for the rebuilding cost, not the market valuation. The rebuilding cost is often lower than the price a property will sell for. That’s because if a property was destroyed, the land would still be left- and the cost of the land is a significant part of the market value
3. Adding in the cost of any improvementsHome improvements, like extensions, kitchens and bathrooms should be included when renewing property insurance as they increase the rebuilding cost, and that inflates the sum insured.
4. Subsidence does not make a property uninsurableProperty insurance generally covers subsidence, landslip and heave. If a property is hard to insure after a claim for subsidence, specialist insurers are available to take on these cases.
5. Acts of God are not included in policiesEvery policy has a list of exclusions. Some people could interpret these as acts of God, but the insurer will pay out if the event triggering the claim is not excluded in the terms and conditions.

“People with questions about their insurance should always talk to their insurer or an insurance broker to make sure they have the right level of cover for their needs,” said Ms Craig.

Editors Notes

The Money Centre’s block policy is priced from £1 per £1,000 of buildings insurance cover. We will be pleased introduce you to the administrators of our Insurance Scheme and they will be delighted to provide a free, without obligation review of your insurance policy and to discuss the terms with you as well as providing an alternative quotation. For further details please fax or email us a copy of your policy schedule. Fax 01603 428545 or email InsuranceRenewals@themoneycentre.com Alternatively, please call Paul Baudinet on 01603 428588.

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