Which insurance options should I consider?

by Readers Question

11:56 AM, 9th April 2015
About 4 years ago

Which insurance options should I consider?

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Which insurance options should I consider?

Which categories of optional insurance cover (i.e. beyond standard buildings and accidental damage, public liability) do small-portfolio landlords here usually take out, or at least favour as potentially cost-justifiable, assuming one uses a good letting agent with sound procedures and non-LHA tenancies?

Many thanks

Glennoptions



Comments

Neil Patterson

12:15 PM, 9th April 2015
About 4 years ago

Hi Glenn,

You have stated the obvious one which you must have, Landlords Insurance, which can include building insurance, loss of rental, legal and contents.

Just for reference the P118 policy has a price guarantee >> http://www.property118.com/landlords-insurance-landlords-buying-group-2/

Mark also uses Rent Guarantee Insurance which is another layer of protection as the tenants also need to pass the referencing required.

Mark has all his properties managed by LettingSupermarket at 4% fees >> http://www.property118.com/letting-supermarket-amend-pricing/68829/
not because he can't do the paperwork, but because if anything should go wrong he is then covered by their Professional Indemnity insurance and Client Money Protection Insurance. Aside from the fact that it is a lot cheaper for him in time and money to pay 4% and have all the work done for him 🙂

Never use an agent that is not covered by these insurances and ask for proof they are up to date.

Another one to consider is Landlord Emergency Cover >> http://www.property118.com/landlord-emergency-cover/70761/
This can cut down on time and hassle when things breakdown for your tenants and saves on expensive sudden one of costs that can affect cashflow.

Jason McClean

15:15 PM, 9th April 2015
About 4 years ago

Hi Glenn

I agree with Neil on these. The Landlord Emergency cover is good if you have a problem property or tenant as it gives unlimited claims through the year and is between £49-£69 in cost.

I don't use rent guarantee myself but understand why others do, so it is down to your appetite to risk.

Just make sure you have good buildings insurance in place as well.

John Constant

15:52 PM, 9th April 2015
About 4 years ago

And lets not forget life insurance too. It is not a foregone conclusion that your next of kin (or whoever you wish to inherit) will be able to keep the property if there is a mortgage on it.

There are some very cost effective policies that can be taken, especially for Company Directors. Please click my profile for contact details.

Glenn Glenn

7:50 AM, 10th April 2015
About 4 years ago

Thank you Neil, Jason and John for your input and advice.

Specifically, I was mulling over Legal Expenses and Home Emergency cover options.

I'd wondered if the terms and excesses of Emergency policies made them expensive for the likely frequency of occurrence and opportunity to claim (notwithstanding the frequency of boiler expiry woes I read about!).

Legal expenses cover on the other hand seems to be inexpensive, which of course prompts me to reflect that the situations where it can be claimed upon cost-effectively are infrequent. Based on your experience as landlords, would you take it out separately ?

Thanks again,
Glenn

Jason McClean

8:32 AM, 10th April 2015
About 4 years ago

Hi Glenn

I took my first emergency insurance out in February after championing it on a property that I manage myself. Late in March the fan in the boiler gave up and was repaired/replaced without me even knowing about it. I reckon that's a £300 fix and call out. So I've saved £230 so far.

Obviously if nothing goes wrong I'll be £69.95 worse off, but all it takes is a single emergency and my experience is that most properties have at least one of them a year.

Legal expenses can come built in to many landlord policies, so check your coverage to make sure it is not included already before buying.

Jireh Homes

10:02 AM, 14th April 2015
About 4 years ago

Depending on extent of furnishings, also consider Landlords Contents. Some policies include the" basic" furnishings at no extra cost so you may need to supplement if rented fully furnished. Excess is typically £250 but can be £500 for water leaks. Allan

Glenn Glenn

11:01 AM, 15th April 2015
About 4 years ago

Reply to the comment left by "Jireh Homes" at "14/04/2015 - 10:02":

Indeed, good point. Although I'm letting completely unfurnished and therefore discarded the need, I think that perhaps that's too simplistic a view. For example, I hadn't considered damage to carpets, blinds etc. Will take a closer look. Thanks.

Jason McClean

11:14 AM, 15th April 2015
About 4 years ago

Reply to the comment left by "Glenn Glenn" at "15/04/2015 - 11:01":

Hi Glenn

It's my experience that claiming on carpets and curtains is difficult as you need to include wear and tear in the assessment. Claims negotiators will certainly take note of age and state of items in the event of a claim.

Glenn Glenn

11:22 AM, 15th April 2015
About 4 years ago

Hi Jason -

That makes it quite a marginal case, then, especially if equipping only a few rooms with 'landlord-grade' carpets and looking at excess vs replacement cost.

Jason McClean

11:36 AM, 15th April 2015
About 4 years ago

Hi Glenn

As an insurer and landlord (non furnished x7 properties) I have never bought landlords contents insurance myself.

The emergency cover is a different product and aimed at a different need. If you stain a carpet, it isn't an emergency, but if the boiler breaks down it is as the property becomes possibly uninhabitable.

Hope this helps!

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