Top 10 Features for Buy to Let Insurance

Top 10 Features for Buy to Let Insurance

16:28 PM, 8th November 2011, About 13 years ago

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Buy to let insurance does not always offer the top 10 features landlords look for in their policies as standard cover.

A review of the market that scrutinised 87 policies from leading suppliers has revealed some of the most popular options are often only available at additional cost.

Meanwhile, cover like insuring against squatters that landlords hardly or never use is included in the premium.

Landlord contents cover – which insures loss, damage or theft to electrical appliances and furnishings – is standard on only 11% of insurance policies, while rent guarantee is not standard with any policy.
The survey by independent financial monitor Defaqto listed the top 10 features on buy to let insurance and then looked for their availability on policies:

Feature % of buy to let policies offering cover as standard % of buy to let policies offering cover as an optional extra
Unoccupied period (Time a policy will cover an empty home) 99% (Ranging from 1 to 120 days) N/A
Loss of Rent 86% 14%
Malicious damage by tenants 47% 17%
Replacing locks after key theft 45% 38%
Employer liability 33%

Unauthorised use of gas, water, electricity if a property is occupied without landlord consent 28% N/A
Damage cover if tenants steal from the property 23% 6%
Squatters insurance – for legal fees to remove squatters) 20% 37%
Landlords contents cover 11% 89%
Rent guarantee cover if tenants default on payments 0% 39%

Mike Powell, Defaqto’s insurance analyst, said: “It is important for landlords to consider specialist insurance for their property portfolio as there are a number of key risks that are specific to rental situations.

“In general, buy to let insurance provides cover over and above regular home insurance policies when it comes to rental situations, and it would be dangerous for someone to assume that their home insurance would provide adequate cover for their buy to let property.

“We have highlighted ten key policy features that amateur landlords should consider when looking for insurance for their rental property. In addition, landlords need to understand the level of cover actually offered by a policy – as although the risk may be covered, the level of cover provided varies widely between policies. As ever, people need to focus first and foremost on the features and cover offered by policies when comparing options and not be driven by price. After all, this would be taking a major risk with their assets.”

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