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Letsure
Tenant Insurance – Letsure Tenant Insurance
for Scotland
Low Cost Landlord Insurance
in Scotland and the rest of the UK
Insurance and Risk
Management for Landlords..... protecting your investment property
October
2007
We
have been advised that as Letsure is now owned by Erinaceous
Insurance Services who also own HomeLet that our link to Letsure
now has to go HomeLet
Jeffrey
Milner Ltd T/A jml Property Services acts as introducers to
Letsure Ltd who is authorised and regulated by the Financial
Services Authority (FSA). Letsure's FSA registration number
is 313817. Letsure Ltd Registered in England No. 03010153
- Registered address: 4-9 Highview, High Street, Bordon, Hampshire,
GU35 0AX, England
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Insurance
information for Landlords and Tenants
Many people
concentrate on either finding a property to rent or making
sure their property is let out. What a lot of people still
tend to overlook is the fact that whether they are property
owner or the person renting they must have adequate
insurance.
Are
you aware that - Some tenants might
be surprised to know that their landlord cannot be responsible
for insuring their possessions, or that they could even be
liable for any damage they cause to the landlord’s goods.
Are you aware that – Finding
specialist insurance for rental properties can sometimes be
a challenge? All too often, landlords find their property
(a most expensive asset) is not adequately covered by standard
insurance policies. Landlord insurance from a specialist provider
is different. It provides the most comprehensive property
insurance there is solely for the rental market
Landlord Insurance
for Let Properties
This is a most important area that
should not be overlooked when Landlords let a property. The risks
associated with let properties are significantly different to owner
occupied properties therefore you are well advised to use an insurer
who specialises in this type of property insurance. An existing,
standard, buildings or contents insurance policy on a property owner
occupied may not cover the property or contents when it is let, may
restrict the cover and or increase the premium. Years ago insurance
companies were not happy about covering let property in the UK, but
today you have a choice. Two of these long established specialists -
Homelet and Letsure can be contacted on this page by clicking
here - this leads to our property insurance site. You can obtain a quote on line and arrange
cover on line.
You should remember that the
following categories of Insurance for Landlords should be looked at:
Buildings Insurance
-This is for re-Build costs - not market valuation. It is
essential that your property is adequately insured. Sometimes the
re-building value will be considerably lower or higher than its
market value. Older properties in the lower priced areas in the UK
will cost much more to re-build that their market value.
In the UK many properties are under
insured, which means in the event of a claim, insurers will not pay
the full amount of the claim. If you have any concerns about the
amount of cover you need for re-building contact a professional
qualified surveyor. If you have an apartment, the buildings
insurance will often be part of the amount you pay out annually for
service charges and ground rent. Check out the situation with the
block management agents. (See below)
You should also advise and obtain
consent to let your property from your mortgage lender, existing
insurer and head lessee (for leasehold properties). Failure to
obtain written consent from these parties may render your insurance
void in the event of a claim.
Many general insurers and mortgage
lenders will not cover the property if you intend to place certain
categories of tenants in your property i.e. Student, Multiple
single sharers and tenants in receipt of State Benefits. Check
this out.
Usually buildings policies will
provide an element of Employers Liability cover. This covers
claims for death or injury to anyone you employ at your property
i.e. a gardener, painter etc. If you are letting to students or to
tenants in receipt of state benefit the university / local authority
will normally require a minimum cover.
It is also essential that your policy
includes Property Owners liability cover to a similar limit
to cover injury, death or damage to individuals on or adjacent to
your property.
When you take out a Buildings
Policy the main insured perils should include Fire - Lightening
- Aircraft - Explosion - Smoke - Impact
- Burst pipes or leakage of oil - Storm or flood
- Subsidence damage - Theft- Malicious damage.
(Some policies will give the option of malicious damage caused by
the tenants - a valuable option for let properties).
Most
policies will compensate you for loss of rent following
damage from one of the above perils if the property is uninhabitable.
Check this out with your block management agent if you have
an apartment and don't arrange the buildings insurance yourself.
It
should be noted however, that damage
to property caused by tenants who are classed as DSS aylum
seekers, refugees or students will no longer be covered under
some buildings insurance for blocks of apartments and you
should seek professional advice. If your flat is let and you
have not taken out additional insurance, you will be held
personally liable in the event of damage to property, including
neighbouring properties, howsoever caused, including all costs
incurred by the Management Company, solicitors, neighbours
etc.
Contents
Insurance - A high percentage of
owner occupied properties in the UK are under-insured for
the contents. Generally individuals place a value of what
the contents are worth not what it would cost to replace
them with new items.
Most
specialist insurers will offer the option of a full contents
policy or a limited contents policy. Limited Contents
Cover. As many UK properties are let unfurnished / part furnished.
A limited contents policy would typically give a fixed limit
of cover for items such as: Carpets - Curtains - Blinds -
Light fixtures and fittings - Kitchen white goods on a new
for old basis.
If
your property is fully furnished or the limited contents would
cost more than £5,000 to replace, you should have a full
contents policy. You would normally select the sum you
wish to insure for; again this should be adequate to replace
all of the contents on a new for old basis.
Emergency
Assistance -This type of cover will
provide assistance for the landlord and the tenant in the
event of an emergency at the property such as: Failure of
the electricity supply - Failure of the cooking facilities
- Lost keys - Plumbing problems - Leaking roofs or guttering
- Security of doors and windows. Policies will provide parts
and labour cover up to a specified amount and either the landlord
or the tenant can call a 24hr 365 day Helpline. (Check
out the details on offer from the insurance company)
If
you have not taken a full management service from your letting
agent or do not live near your property this can be a cost
effective solution. Please note that that these policies cover
Emergency Assistance only and not a repair service
through lack of routine maintenance.
Legal
Expenses Insurance - Even when using
the services of a professional letting agent, problems with
tenants can occur. In many cases the tenants personal circumstances
have changed during the term of the tenancy.(See Section
Advice
for Landlords on Property Services site - Click
on blue words above) Situations like loss of their job,
failure of their business, a relationship break-up, accident
or illness will effect the tenants ability to pay the rent
or their inclination to move out at the end of the tenancy.
All
these situations can be resolved but will usually involve
a Court hearing and solicitors costs. Legal expenses insurance
will usually cover all of your legal costs, solicitors/barristers
fees, Court and bailiffs' costs. Most such policies will cost
well under £100, which represent less than 45 minutes of a
specialist solicitors time on a normal fee paying basis. The
"average" legal cost of a possession hearing in
2001 was £785, many cost well over £1,000.
Rent
Guarantee Insurance -These policies
are invaluable for many landlords. As a tax deductible premium
this will guarantee you receive the rent you are expecting
from your property regardless of your tenants personal circumstances,
ability or willingness to pay the rent.
If
you have a mortgage on the property or have calculated your
rental income verses your outgoings this will ensure you do
receive your rent. Most such policies will include the legal
expenses, as detailed above. You will receive your rent and
the legal fees to obtain vacant possession will be covered.
Policies
will usually guarantee your rental for a fixed period, typically
6 or 12 months. Some policies will provide additional cover
once you have obtained vacant possession until you are able
to re-let your policy.
The
costs vary from a fixed cost policy or are commonly rated
as a percentage of the annual rental figure, typically 3-4%.
Tenants
Contents Insurance
Tenants
very often overlook this, especially those who have never
rented before. A tenant who has paid the first months rent
plus a deposit and administration fees in order to move into
the property, insurance is the last thing on their mind. Recent
studies have shown that less only 1 -20 tenants have any contents
cover at all. Although a conventional home contents policy
will give a basic degree of cover for most insured perils
it is not specifically designed for tenants and there can
be some major gaps in the cover you need. Often the minimum
sum you can insure for will be far in excess of what the tenant
needs, typically a minimum of £10,000 - £12,000.
Most
specialist tenant policies will provide the tenant with cover
starting from £2,500 upwards and will usually cover accidental
damage that you may cause to the landlords fixture, fittings,
buildings and contents. Should the tenant accidentally damage
the carpet with a wine stain or hot iron or a work surface
with a hot pan mark, these events will be covered. Usually
the tenancy agreement will make the tenant legally liable
for such damage, any damage found at the time of the check-out
will be deducted from the deposit or security bond. If the
tenant has adequate insurance these events will be covered,
thereby protecting your deposit.
If
a Tenant has a loss through, burglary, fire, flood or other
insured peril, which has damaged their contents and have no
insurance for their personal possessions they are then left
with the cost of replacing the items themselves.
Any
items of personal property (clothes, furniture, computers
etc) a tenant takes into the property it is their responsibility
to insure. Most policies will give an option for basic cover
which can usually be extended to cover high risk personal
items which are taken outside the home, on holiday or Worldwide
i.e. Cameras, sports equipment, clothes, jewellery etc.
In certain high-risk inner city post
codes there will usually be a requirement to have minimum-security
locks on doors and accessible windows. Do also take into account
the conditions of insurance policies, regarding keeping windows
and doors secured when the Tenant is not in the property.
For further information click
here this leads to our insurance site.
N.B. This information
should not be relied on for accuracy and is presented here
without the responsibility of jml Property Service and the
website it is being displayed at. ©jml property Services 12-04
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are unable to give advice regarding insurance or assist with
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must contact the insurer direct.
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