Insurance

Stutrumpet

Has anyone advice on the type of insurance available to cover unfurnished lettings. Ideally, I would like to insure against fire, water leaks, damage to fittings and against loss of rent due to the Tennant not paying. All our flats are let via a reputable agent.

Many thanks,

Stewart

silvercar

Buildings insurance for the buildings, include cover for damage caused by leaks etc.

separately take out insurance to cover tenant’s rent arrears. 

Stutrumpet

Thanks silverware for the quick response. The flat in question is one of a block of 12 purpose built. Top floor, no gas. I am also a shareholder/owner - we have AGM's where the leaseholder's agent gives reports etc.

There is a small fitted kitchen - no white goods. The carpet were there when we bought the flat. Heating is two wall-mounted panels that just plug into existing 13 amp sockets. So, really, the only concern for insurance would be damage to the carpet if there was a leak in the plumbing.

It seems all insurers only cover water if the damage exceeds £500 so probably not worth paying £239 buildings insurance? The same company (just landlords.co.uk) quote £260 (with no excess) for tenant default.

Would you say it is worth taking out just the default insurance? We have a very good agent managing the rent but I suppose there's always a chance of a rogue tenant. With all these new regs, how long would it take to get a tenant evicted if I was quick off the mark following the tenant missing just one month's rent and would the default insurance cover all my legal costs as well through to potential High Court action as well as unpaid rent?

Apologies - I keep thinking of more questions  

Nearlyold

Unsurprisingly Landlord Insurance is the overall name for the insurance you're looking for, we use Direct Line for our properties. Most if not all insurers will offer a core policy covering the basics plus various optional add ons like cover for non payment etc.

Stutrumpet

Thanks Nearlyold - perhaps I'll try Direct Line and see if I can get an 'all-inclusive' quote.

theartfullodger

Alan Boswell decent insurance brokers.

But check what you the landlord have to do first...

DD265

I'm not sure if it's the same for Buy to Let mortgages, assuming you have one, but on a 'regular' mortgage, buildings insurance is usually a requirement in the T&Cs, so it's definitely worth checking if something like that applies to you as well

user1977

If it's a leasehold flat then presumably there is a buildings policy already arranged by the freeholders? Have you checked what components you actually need to cover in addition to that? I suspect not much (kitchen units/appliances, floorcoverings etc, perhaps).

Stutrumpet

Thanks both - I have checked freeholders insurance and, as you say, not much for me to insure except potential water leak and I'm sure the £500 excess makes that unaffordable. Even if there was a leak down to the next floor flat my understanding is that they have to claim on their own insurance.

saajan_12

Stutrumpet said:

It seems all insurers only cover water if the damage exceeds £500 so probably not worth paying £239 buildings insurance? The same company (just landlords.co.uk) quote £260 (with no excess) for tenant default.

Would you say it is worth taking out just the default insurance? We have a very good agent managing the rent but I suppose there's always a chance of a rogue tenant. With all these new regs, how long would it take to get a tenant evicted if I was quick off the mark following the tenant missing just one month's rent and would the default insurance cover all my legal costs as well through to potential High Court action as well as unpaid rent?

Insurance isn't really meant to be cheaper on average than the alternative, ie 'probably' it won't be worth it, else the insurance co would never make it any money. Its meant to take out the volatility of unexpected events. Eg something that happens 1% of the time could be disasterous if you happen to be the 1%. But you're paying more than 1% of the potential loss in insurance premiums for that peace of mind. 

For a tenant default, the £260 probably covers the [3-4] months rent plus court fees (say £500) and maybe some property damage, times the % chance the tenant defaults. However if a tenant default would mean you can't make mortgage payments, can't maintain the property leading to fines, etc etc, then the insurance could still be worth it to you.