It might be boring, but it pays to understand your property insurance conditions
Even some of the more current buy-to-let insurance policies contain a fair amount of small print.
Still, however dull it may be, it’s better to take the time to understand the critical elements BEFORE the worst happens and a problem occurs, or you have a claim rejected.
These are just some of the key elements to look out for which may be included in your Landlords Insurance policy.
We would suggest you review your own individual cover with your insurer advisor to ensure it reflects precisely what you need.
#1 Flat Roof Condition
Your policy may include a clause that a flat roof at your property needs to be inspected by an expert on a regular (typically bi-annual) basis and any suggested rectification should be actioned.
If this condition is present and you fail to act on this, then you could find yourself in breach should a resultant claim occur which is directly related to the flat roof.
#2 Buildings Sum Insured & Index Linking
If you have had your policy running for several years, you may have noticed that the sum insured is increased annually by what is known as Index-linking.
If this condition is present, then your property insurer will raise the current sum insured in relation to an independent index run by the Royal Institution of Chartered Surveyors (RICS) known as the Building Cost Information Service (BCIS).
This is good news as it should ensure that your sum insured does not fall foul of inflationary increases relating to the cost of building material and labour. However, this assumes that the correct sum insured was set originally AND that no other external factors are influencing your specific property (e.g. specialist stonework).
BCIS include a useful calculator which can provide a guide for a standard property.
Still, we would recommend a professional valuation for ultimate peace of mind and to avoid any underinsurance issues.
#3 Malicious Damage by tenants
Malicious damage by tenants is damage caused by your tenant that would not be classed as accidental.
Typical examples could include: punching a hole in a door or wall, smashing worktops or windows, or worse still, spraying graffiti.
Check your policy wording carefully to see if this condition/exclusion is present.
It may be possible to pay an additional premium and buy the cover back in, or you may be comfortable for a professional let that this is a non-issue, but at least you will be making an informed choice.
#4 Theft of Building Fabric
Theft of lead from the roofs of buildings and churches has been a significant issue across the UK over recent years.
The problem from an insurance perspective is that many property policies include a “theft by forcible or violent entry” condition.
What this means in plain English is that for a theft claim to be valid, the property needs to have suffered a forced or violent break-in.
Several Landlords Insurance claims were therefore rejected where lead or roof tiles were stolen, as the property had not been broken-into.
To bring more clarity, some insurers are now providing specific cover for theft of building fabric.
If you believe that this could be an area of risk, we would suggest you ensure that your policy includes such a clause or has the forcible and violent entry condition removed.
#5 Unoccupied Property Condition
Insurers are rightly concerned about the increased exposure to claim when a property is unoccupied.
As such, a buy-to-let policy will typically include some specific conditions if your property remains vacant for an extended period (generally beyond 30, 45 or 60 days, but you should review your individual wording).
It is vital that you fully understand the required conditions specific to your policy which may include frequency of inspection and/or turning off mains services.
If the terms appear too onerous, you could choose to purchase a specialist unoccupied property insurance policy which is more tailored and can accommodate periods of unoccupancy and/or renovation projects.
These are just a few of the many possible conditions which a property insurer could impose, but we hope it gives you a flavour of the potential complexity.
We would suggest you take the following steps to provide you with peace of mind that your investment is fully protected:
- Review your current Landlord Insurance Policy and highlight potential areas of concern
- Speak to your Business Insurance Broker or advisor who can guide you to ensure the policy accurately reflects your needs
- Adjust any procedures and processes to ensure that you meet any specific policy requirements (for example – frequency of letting agent inspections during tenancy gaps)
FREE Insurance Review
Insync Insurance is a property insurance specialist, you can compare landlord insurance online or why not book a FREE review of your current property insurance policy, you can arrange a slot with one of our team via our website at a time that suits YOUR diary, alternatively call 0330 1240730 for more details, we would love to hear from you!