Friday, November 25, 2011

Conducting that let property insurance review

Conducting a let property insurance review is something that it is easy to find reasons to put off.

There are, however, a number of reasons that typically suggest it should be an activity somewhere higher up the list of a landlord's priorities:

• with escalating operating costs and relatively tight business margins, landlords may be increasingly aware of the need to constantly review both their cost and risk bases - any existing landlords insurance you have will be part of those bases;

• a let property insurance review is sometimes misconstrued as essentially being a fairly high level trawl of the landlords insurance market to try and see if it is possible to find cheaper cover - in fact, it may be advisable to regard cost comparisons as being of secondary importance to the cover provided by other policies versus the one you already have;

• one thing that may be worth looking at specifically, when conducting your let property insurance review, is the position of your existing policy with respect to subsidence risk - some policies no longer include it as standard cover although some still do;

• it might be prudent, assuming you are letting out your property on a furnished basis, to check whether your contents cover levels are sufficient to cope with a disaster situation that affected them all;

• the total value of your buy to let buildings insurance needs to be an accurate reflection of the type of costs you may face in the event you had to completely rebuild your property following a disaster (including things such as surveying and architect's fees etc) - these valuations may change over time and it is important that your insurance continues to provide appropriate levels of cover (this may also be a worthwhile task even in terms of your existing policy);

• it is also typically advisable to sit back and review how you are currently using your property versus the way you originally used it at time you took out your existing insurance - for example, some policies may exclude certain broad definitions of tenants, such as DSS or students, which may not have been a problem for you initially but if you are now letting to such tenant categories, you may wish to consider a landlords insurance policy that offers all-tenants cover;

• remember also that if your property stands unoccupied for a period exceeding a number of days typically specified in your policy (typically 30-45 consecutive days), then your existing standard landlords insurance may become invalid and you may be in need of an unoccupied insurance quote;

• this is only a brief summary of some of the reasons why finding time for a periodic let property insurance review may be advisable.

By: Richard Burgess
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  1. Thanks for the comment and your loyalty, Brad :)

  2. That is true, Ashok... as you say that, "Property insurance is a best way to protect yourself and your interests." I agree with your opinion :)