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you are here: Homepage > News Index > Buy to Let News 24th April 2008  >

Buy to Let Insurance News. Landlords make sure you are covered The insurance of flats within a block can often prove problematical and indeed when a flat in a block has been purchased as a buy to let investment, sometimes the confusion as to who should insure can be greater than usual.   In the main, flats in blocks are sold on a leasehold basis and the Freeholder arranges the insurance and will subsequently charge the leaseholder a proportion of the premium. In the case of a buy to let, the landlord will pay the insurance premium. However, there can be two main gaps in cover which any Landlord needs to consider. Firstly, the insurers of the property may not be aware that a portion of the building is being rented out. This will need to be checked most carefully as, if not notified, the correct cover may not be afforded to the landlord and in the event of a claim, landlords may find they are not covered at all. Secondly , it is a good idea to write to the Freeholder and advise them of your intention to let the property to a tenant and request their confirmation that the terms of the lease will allow you to do this. Some leases will forbid the letting of flats. Ask the Freeholder to inform the insurance company that the building is part tenanted and always seek confirmation in writing that the fact has been noted, Verbal confirmation is not sufficient and it is only when written conformation has been received, can you be satisfied that your interests have been protected. It may be an idea as well, to check with the Freeholder as to the type of tenant you are intending to place in the property. Most other owners in the block wont be too happy if you palace a tenant in your buy to let flat that causes nuisance. The two sections of a block of flats insurance that need attention are the liability section, noting that the property is rented and the alternative accommodation section. Alternative accommodation cover provides for a temporary replacement property or accommodation following a loss at the insured premises. Following a loss at the insured premises, often the tenant moves out or moves on. The landlord is then faced with a situation where he is loosing rent until such time as the property can be reinstated and is ready for rental once more. One thing to bear in mind with this section of a policy is that the sum insured is usually limited to 20% of the total sum insured. If a building contains 6 flats, then this sum insured will have to be sufficient to provide loss of rent or alternative accommodation for all flats if necessary. It must be remembered that loss of rent cover is restricted to looses incurred following an insured peril occurring at the property. It will not cover loss of rent by tenant default (separate cover can be purchased for this). Also, if you decide to renovate the property, the insurance will not cover you for the period that the property is unoccupied. If the landlord finds that the building insurance has been arranged by the freeholder, he is then left with the problem of insuring the contents, This can prove problematic as often insurance companies are not keen to insure landlords contents because of the low sum insured and low premiums that can realistically be charged. Often landlords take a view that they will leave the contents uninsured as in most cases, they have to be replaced on a fairly regular basis anyway. However, with a bit of shopping around contents insurance for a buy to let is available. Certainly it is a good idea, as by insuring your contents, you should be making sure that you are obtaining the correct liability insurance that attaches to the ownership and supply of the contents in the property. If purchasing contents insurance as a landlord for your buy to let property, most of the perils that are covered by a standard home insurance policy will be included, you may find that there are certain conditions attached to the policy because the property is rented, including a clause stating that any Theft claim must be as a result of forcible and violent entry to the property. Remember always to study policy documents most carefully. In is also a good idea in respect of flats that are partially furnished, to make sure your tenant is aware that you are not responsible for covering their belongings.. They will need to make their own arrangements for insurance cover.     back to top