The Importance of Specialist Landlord Insurance

As a landlord, arranging appropriate insurance for your buy-to-let property is crucial for safeguarding your investment. Comprehensive landlord’s insurance is essential to protect you and your finances from unexpected events that may result in an insurance claim.
While regular household insurance provides cover for your building and possessions while you live there, letting a property to tenants carries additional risks that standard home insurance will not cover.

This omission could leave landlords facing financial losses if something goes wrong – a situation easily avoided by having the appropriate coverage in place.

What’s covered?

So, what’s included under a comprehensive Landlord’s Insurance policy?
A key section of cover is protection for the building itself – the structure. This includes walls, roofs, and permanent fixtures like fitted bathrooms or kitchens.
Property Owners Liability is another important aspect, extending cover to the landlord should a third-party make a claim against you in connection with your ownership of the building. For example, someone trips and injures themselves whilst on your property and holds you liable for their injury.
Landlords also have the option to insure any of their own contents within the property, including basic furnishings, electronic devices, curtains, and carpets.
One of the most important features of any landlord’s policy is coverage for lost rental income and alternative accommodation following an insured event. This comes into play if your property becomes uninhabitable following an insured incident, such as a fire or water leak, and your tenant needs to move out of the property. The policy should also include cover for alternative accommodation if your tenants need to be re-housed during repairs.
Don’t overlook it.
Your buy-to-let property might become vacant for various reasons, including renovations, repairs, or simply a gap between tenants. Some insurers will look to restrict policy coverage during this period when the property is empty due to the perceived increased risk of an empty property. Therefore, it is important to consider a policy that offers full cover for extended periods. It is also important to consider a policy that doesn’t charge extra premiums for essential protections like accidental damage, malicious damage, or theft by tenants.
One of the most common reasons for claims in rental properties is water leaks, so consider a policy that not only offers a reasonably low excess for such incidents, but also includes ‘trace and access’ cover as a standard feature. This covers the expenses associated with locating the source of a leak, such as a burst pipe hidden beneath floorboards or concealed behind bathroom tiles.
Get the numbers right…….
Ensuring that your buildings and contents are insured for correct amount is the landlord’s responsibility. One way of achieving this is by having your property professionally surveyed for a valuation of the ‘rebuild’ cost. This means the total cost of completely rebuilding your property from the ground up in the event of a total loss. This approach ensures that in the unlikely case of a major event like a fire, you will receive appropriate cover without worrying about being underinsured – and as a result, claim payments proportionately reduced due to a policy condition known as the ‘average’ clause.

Index Linking is essential to ensure your rebuild cost remains accurate. It increases the rebuild value each year to account for inflationary increases to building materials, labour, and other associated costs. This provision aims to shield landlords from the perils of underinsurance, with the percentage typically calculated by experts like RICS and the BCIS House Rebuilding Cost Index.

While a landlords policy provides cover for many insured perils, it is also crucial to know what is not covered. Your policy will not cover things like your policy excesses, property damage following gradual wear and tear over a prolonged period, or your tenant’s possessions.

Cairn have established a partnership with Howden, a reputable, local independent insurance broker that specialise in arranging Landlord’s Insurance in the UK.

Howden have arranged a block insurance policy for all properties fully managed by Cairn, which provides a bespoke Landlord’s Insurance policy encompassing all the features outlined in this article, among many other key benefits.

These benefits include:

• Discounted rates – landlords have access to discounted rates available for all properties fully managed by Cairn.

• Howden have delegated claims authority up to £5,000 – meaning that claims are dealt with quickly and efficiently, without the need for referral to underwriters.

• Ease of initiating a claim – Cairn are authorised to initiate claims your landlords’ behalf

• Ease of claims and a personal service from Howden’s in-house claims team – this ensures a personal service from our claims team. There is no call centre – you will always be able to speak directly to someone in the team.

• No administration fees – most other providers will charge an administration fee for arranging and setting up the policy

• Specialist knowledge of the PRS sector in Scotland – Howden are one of the few brokers in Scotland with a unique specialism in the Scottish private rented sector, meaning tailored support and solutions

To obtain a no-obligation quotation, feel free to contact your Property Manager at Cairn on 0141 270 7878 or 0131 622 6215 or Danielle Richards at Howden on Danielle.Richards@Howdeninsurance.co.uk or 0131 553 9997.