7 reasons why landlords who own a leasehold property need specialist insurance
As the owner of a leasehold property, you normally contribute to the cost of buildings insurance via your regular service charge payment. This insurance is to cover the cost of repairing or rebuilding the property if it’s damaged by things like fire, subsidence, storms, vandalism or burst pipes. It should also cover damage to communal spaces, such as halls and shared gardens.
However, it does not provide the protection you are likely to need as an individual leasehold landlord in the business of renting out your property.
Here are 7 key reasons why you should consider taking out your own specialist landlord policy:
- Your mortgage company may require it
While lenders will require you to have buildings insurance in place as a condition of any mortgage loan, some buy-to-let mortgage providers may also specify that you need a specialist landlord insurance policy. Check this ensures you’re covered for risks that standard buildings insurance may not include, such as loss of rent or landlord liability
- Your tenant might damage or take the contents
A specialist landlord policy can protect you against both accidental and malicious damage by tenants - and it’s not just for landlords letting their property fully furnished. Even if you have only provided basic furnishings, such as carpets, curtains and white goods, it’s important to consider how much it would cost you to replace those without insurance.
- Your fixtures and fittings may not be covered under the buildings insurance
While the main buildings policy should normally cover damage to things like kitchen and bathroom fittings in individual properties, some policies may not, so it’s important to check and take out your own insurance if necessary.
- A neighbouring property might cause damage to yours
For instance, an overflowing bath or defective shower in one flat may result in water damage to the property below. This is known as third-party liability, and it’s not necessarily included in all buildings insurance policies, so you may need to take out your own additional cover. While the freeholder’s policy might cover structural repairs, it may not include third-party liability or damage to fixtures and fittings within your property. Check by taking out your own specialist landlord insurance this can help protect against these risks.
- If someone is injured in the property, they may make a claim against you
In this case, a policy that includes public liability insurance can cover your legal costs - including any compensation awarded - if a tenant, contractor or visitor injures themselves in your property and brings a claim.
- You may need to take legal action relating to the let
Any legal action has the potential to become expensive, and while it’s rare to have to go to court, if you do need to take action against a tenant for example, it’s worth considering having legal expenses cover for peace of mind.
- You may need to find alternative accommodation for your tenants if the property is uninhabitable
If the property becomes uninhabitable as a result of an insured event, such as a fire or flood, does the buildings insurance cover the cost of you finding alternative accommodation for your tenants? And if your tenants simply find somewhere else to live, are you covered for loss of rental income while the property cannot be lived in? If not, check if this can be included in your own landlord policy.
If you are a current landlord with any of the agencies in Leaders Romans Group, an insurance quote is ready and waiting for you in your online landlord account. No fuss or forms to fill out!
Or, if you’d like to speak to an expert directly to help you create a tailored policy for your leasehold property, call 01903 890044 or email the Bode team on info@bodeinsurancesolutions.co.uk or by getting a quote online.
Bode Insurance Solutions Limited is registered in England (Company no 03101637) Registered Address: Crowthorne House, Nine Mile Ride, Wokingham, Berkshire RG40 3GZ.
Bode Insurance Solutions Limited is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference 313541.
You may check this on the Financial Services Register by visiting the FCA’s website https://register.fca.org.uk or by contacting the FCA on 0800 111 6768
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