Landlord Insurance Query – Public liability for flat?

by Readers Question

10:42 AM, 2nd March 2016
About 3 years ago

Landlord Insurance Query – Public liability for flat?

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Landlord Insurance Query – Public liability for flat?

I have a landlord insurance query that I hope some may be able to advise me on.flat

I am looking to get landlord insurance on a buy-to-let flat (yet to exchange) within a house that’s been converted into 4 flats in total. I will have a share of the freehold of the flat, which is held within a company. The company has a block buildings insurance policy and I therefore only need public liability insurance (the flat is unfurnished so I don’t need contents insurance).

I have spoken with a landlord insurance company and they informed me that I could not purchase public liability insurance on its own and had to have a form of contents insurance or building insurance in order to get this – is this correct?

I’m a little confused as I don’t want to buy extra insurance unnecessarily and I only want the public liability bit to insure me against any accidents the tenants may have (and possible accidental damage by tenants and track and trace).

Before I knew about the block insurance, I got a quote online, which included public liability and buildings insurance and this was roughly similar to the price I will be paying for the block insurance policy. The quote I was given on the phone when I just asked for public liability however, was even higher than this, which seems strange if it doesn’t include the buildings insurance aspect.

I want to make sure I’m getting the correct cover and not getting cover twice, so any advice would be very much appreciated.

Many thanks,

Martha



Comments

Neil Patterson

10:47 AM, 2nd March 2016
About 3 years ago

Hi Martha,

We have had a recent article written by our insurance partner Jason: Insurance Explained – What is Landlord Insurance?
see >> http://www.property118.com/insurance-explained-what-is-landlord-insurance/84828/

From an extract: "Block Landlord Insurance and what it means for you

If you own a leasehold flat then you will have a landlord in charge of the block who will supply the buildings insurance. You cannot double insure the property, that is pointless and will cost you money for no benefit. Ultimately you will be found out in a claim and could face action for fraud. Ignorance is not an excuse.

You can buy Landlords Contents Insurance and that allows you to add liability cover, Rent Guarantee Insurance, Landlord Emergency Insurance, Legal Expenses Insurance or even Boiler Cover. What you can add on will depend on the insurer you are talking to.

Many landlords will buy a minimum of £5000 Landlord Contents Insurance in order to access the liability cover alone – which is normally providing around £1-million cover."

Our Property118 Landlords insurance Guarantees to beat any like for like quote and you can apply here if you wish >> http://www.property118.com/insurance-landlords/

Mandy Thomson

11:20 AM, 2nd March 2016
About 3 years ago

Even if the property is unfurnished, you still need to insure the fixtures and fittings (e.g. fitted kitchen and bathroom fittings, but not plumbing) and this is usually what landlord contents only insurance covers as a minimum.

Gary Nock

15:54 PM, 2nd March 2016
About 3 years ago

Buy the contents insurance but make sure that the exclusions do not mitigate or undermine the cover. For example the cover may exclude students or DHSS tenants. The £60-£70 it costs is peanuts compared with a £1000 plus claim from a tenant for tripping over a worn carpet edge

Gary Nock

15:56 PM, 2nd March 2016
About 3 years ago

And Mark Alexander told me to do this years ago!

Jason McClean

16:43 PM, 2nd March 2016
About 3 years ago

Hi Martha

Yes, you need contents insurance to access public liability right now. Appreciate you may not need contents cover, but it's the only way to access public liability and is a route many take.

However, along with 118, I am working on a standalone Public Liability Insurance product that I hope to have access to shortly, I am waiting on underwriters to come back to me and have chased them today based on your enquiry.

We hope to have news on this product - and another insurance for sub let landlords shortly as it is clear the market needs these.

Best

Jason McClean
07734-113554

Monty Bodkin

17:54 PM, 2nd March 2016
About 3 years ago

Reply to the comment left by "Gary Nock" at "02/03/2016 - 15:54":

The £60-£70 it costs is peanuts compared with a £1000 plus claim from a tenant for tripping over a worn carpet edge.

I reckon that is prudent move and it helps you to sleep at night.

-But I don't do it. (NB we are just talking about leasehold flats now.)

My thinking as follows-

Most of the liability risk is covered by the buildings insurance.

So you are only left with the tripping over a carpet edge scenario.
i.e risks within the flat.*

All my flats are let to non-vulnerable people, are modern and well maintained.

So using Gary's figures above (not saying they are 100% right but a reasonable start point).

A medium portfolio landlord with 20 flats paying the above premiums over a 30 year career equates to about £40,000 (not including compounding.)

Again using Gary's figure above of £1000 plus claims, that is a hell of a lot of (genuine) trips over well maintained carpets. I've never had one.

Even if the insurance company did pay out

.....and then continued to insure a habitually unlucky landlord.

Insurers and brokers advise insurance against every risk.

As I said, not saying this isn't a prudent move but I don't do it.

Just putting it up for debate.

Martha Hill-Cousins

23:12 PM, 2nd March 2016
About 3 years ago

Hi all,

Thanks so much for your comments! I think I will call the insurance company who are providing the block policy cover to the house of flats to confirm what they do and do not cover.

There is an element of contents insurance covered in this policy and I don't want to double insure myself. As Neil has pointed out above from the Insurance explained article, I don't want to risk a potential fraudulent claim if I have accidentally double insured myself. Although, if I have to have an element of contents insurance in order to get the public liability insurance, it seems I may have no choice but to double insure myself on the contents aspect (if my block policy also has contents insurance) - or am I misunderstanding?

The policy also mentions 'occupiers and personal liability' but not public liability and, under the 'contents' section, it mentions 'tenants liability'.
I am unfamiliar with the meaning of these terms so I think I will need to speak to them directly to explain my situation and see what they can offer me for the additional public liability aspect.

Jason your work on a standalone public liability insurance policy sounds very promising and I shall be keeping an eye on property 118 for any updates!

Many thanks again all.

Martha

Chris Byways

8:55 AM, 3rd March 2016
About 3 years ago

Surely being double insured is not fraudulent, unless done with that intent? It is claiming twice for same item that would be the fraud.

You must have some landlord items for potential insurance in an unfurnished flat, IE fire blankets, lamp shades, perhaps carpets etc.

If Monty wished to, I think personal liability insurance would be viable for all his activities, googling PLI gives many peddling it, so sure Jason will get some. But checking the AST wording to ensure tenant has the responsibility to insure own items, all risks for accidents, and that no indication of insurance is given that isn't provided.

Gary Nock

9:15 AM, 3rd March 2016
About 3 years ago

Hi Monty

Please do not assume that the Freeholders block insurance will cover you in the event of a claim in a communal area. There was a stated case last year as I recall on a liability on landlords as well as managing agents for communal areas. If the Freeholder denied liability then the claimants no win no fee vultures woud come after the landlord. They probably would anyway as they would go for both the landlord and The Freeholder in the first instance to hedge their bets. I have checked on this in the past Freeholders block insurance will not cover a landlords public liability.

Jason McClean

9:25 AM, 3rd March 2016
About 3 years ago

Don't assume that the landlord's insurance will cover you. Find out by getting the policy schedule and checking. If it doesn't then you can make an informed decision!

I hope to update ref PL soon.

Best

Jason

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