Buy to let House Insurance
Have you Got It All Covered?

Buy to let house insurance (also called landlord insurance) is similar to the buildings and content insurance policy you have for your home. The perils covered are almost identical. However, the policy is extended to give the correct liability cover for a buy to let property.

To be quite frank, this is another one of those pesky expenses that you as a residential landlord are responsible for.

There is a standard cover option or various optional extras to help protect you and your investment.

The standard cover

• Buildings insurance – This covers you in the unfortunate event that your house falls down or gets blown away by some freak hurricane. You're also covered for fire damage and subsidence. A Buy to let mortgage lender will refuse to lend money on an investment property, unless you have this cover in place. Their interest must be noted on the policy, also.

  If your property is held under a lease, cover for buildings insurance is arranged by your landlord. The payment is then recovered from you via the service charge arrangements. Leaseholders letting out their properties will often need to inform their management company that the property is let. The management company can then notify the buildings insurance accordingly.

If you want peace of mind as a landlord, consider the following extra options. But just remember that buy to let house insurance companies make their money by selling these extra add on's by frightening you with scary sales tactics.

Optional Extras

• Contents Insurance – Will you be furnishing the property? If so, then you may want to consider covering your contents under this policy. If you're not, there is no need for this extra expense.

• Legal expenses – What happens if the tenant suffers an injury? For example, an electric shock caused by a faulty wiring?

  I know what your probably thinking… "Sod the tenant, he's always late paying my rent". But what if it's a contractor carrying out some work on your behalf? You may want to consider this protection. This will cover all of your legal costs, solicitors/barristers fees, Court and bailiffs' costs.

• Rent guarantee – if you're worried about not receiving the rent, this extra protection may suit you. This cover usually guarantees your rent for a fixed period, typically 6 or 12 months.

• 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.

  Again you need to decide if you will need this cover. A call out job for this type of incident can cost £100's but an annual cover may cost less than £50 per year.

The decision to take out extra cover depends on how you handle risk and whether you're willing to carry out these jobs yourself. The more extra protection you take out the higher your buy to let house insurance premiums will be, which affects your net profit.

I personally only cover my properties with buildings insurance but you may want to sleep soundly at night and decide to choose some of the extra options.

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