#1 Warranties and Conditions
We have made this our number one as warranties and policy conditions are often overlooked, but are absolutely critical to your buy-to-let cover.
If a policy carries a warranty (for example a security warranty that certain theft protections or locks much be in place), and the warranty terms are not met, the insurer can refuse indemnity to pay a claim.
You should compare every single condition or warranty very carefully to ensure that you can meet the requirements.
There is no point in buying a cheap let property insurance, only to find out that it is effectively worthless if you are not meeting the policy conditions.
#2 Unoccupied Property Conditions
Any let property is likely to have periods of unoccupancy between tenants, as such, you must understand the insurer requirements should this occur and that you are comfortable with any conditions applied.
Some policies will automatically allow 30 days unoccupancy period without the need to notify insurers, with full cover remaining in place.
Others will request that the insurer is notified of any unoccupied period, as well as potentially imposing restrictive terms such as weekly visits to the property or an increased excess.
At it’s worst, some insurers will not allow extended unoccupancy at all, and you will need to purchase a specialist unoccupied property insurance policy.
#3 Malicious Damage by Tenants
Another major area of comparison between let property insurance contracts is the exclusion or inclusion of “Malicious Damage by Tenants” cover.
Many cheap Landlord Insurance policies will exclude this cover, and you could inadvertently discover that you are not protected after an attempted claim.
Malicious Damage by Tenants is damage purposely cause by the tenant, such as drawing on, or punched holes to doors or walls.
At it’s worst whole kitchens or bathrooms could be damaged, and without adequate cover, you would be left with a loss far in excess of any rental deposit.
#4 Loss Of Rent Insurance
Not to be confused with Rent Guarantee Insurance, Loss of Rent cover provides indemnity for lost rent following an insured loss.
This is another key area which you may want to protect and is not always included as standard under all buy-to-let insurance policies.
For example, your property suffers a fire and is not available for rent for 10 months while rebuilding, and renovation work is carried out.
Loss of Rent Insurance will reimburse your lost rental income.
#5 Legal Expenses Insurance
When you are dealing with Letting Agents or Tenant Contracts, legal disputes are all too common. As such, you may consider Legal Expenses Insurance as a necessity, but not all policies provide cover as standard. Therefore, it is essential to read the small print and allow for the cost of a separate policy within your comparison process.
#6 Property Owners Liability
If you own a let property you owe a duty of care to your tenants and the wider public in respect of any injury claim or damage to property.
For example, a tile falls from the roof and damages a car below or injuries a passer-by. Alternatively, a tenant receives an electric shock from a faulty light switch or trips on a loose tile and breaks their arm.
Such incidents are not uncommon, so it is important that your policy provides adequate protection. Many policies do provide Property Owners Liability Insurance as standard, but you should compare the limits carefully as well as identifying any additional premium charged.
#7 Claims Service
It may seem obvious, but any insurance policy is only as good as it’s claims service, but how many people actually take the time to ask and understand the claims process BEFORE they purchase a policy?
Find out whether the insurer provides their own claims handling service or whether it is outsourced to a third party? Are 24-hour emergency claim lines available?
What are the average settlement times and processes for small losses such as a broken ceramic hob or glass claim?
#8 Payment Plan or instalment Charges
If you usually make premium payment via monthly direct debit you should compare the full premium levels PLUS any added interest charges for paying by instalments.
Some offers may look good value, but with high-interest charges, they could end up costing you considerably more in the long run.
#9 Additional Covers
Some policies are now automatically providing an element of Boiler Breakdown or Home Emergency protection.
This is great news if you need this cover, but take the time to compare the wording carefully as cover can often be restricted against a standalone policy with lower limits or higher excesses.
#10 Advice or No Advice?
Another area of consideration includes your own level of expertise and ability (or time) to manage both the policy purchase and any problem should a claim occur.
If you buy a policy from a pure online provider or directly from an insurer, chances are you will be making the purchase on a “non-advised” basis.
What this means is that the onus is completely on you to have read and understood all the policy terms and conditions.
Alternatively, if you engage the services of a Landlord Insurance Broker, they will be able to provide specialist advice, helping you compare the different policy cover available and ensuring that it is tailored to your needs.
Similarly, if a claim is disputed, a broker can take the stress out of the situation by engaging with the insurer on your behalf, using their expertise to make sure that you receive a fair settlement.