Landlords Contents Insurance
Contents cover for a landlord can be added to your buildings cover and this is probably the cheapest way of obtaining cover. On the basis that most landlords do not provide a great deal of contents for tenants, a stand alone policy can prove to be quite expensive as you will normally fall under the providers minimum premium threshold. Obtaining contents cover as a stand alone product is sometimes the only option, particularly if the buy to let in question is a flat and the building cover is arranged by the Freeholder. Although contents insurance is not compulsory, when coupled with buildings cover, it is cheap to buy and can afford valuable protection. Cover is based on a standard policy that you would expect to have for your own home but all of the cover for valuable items such as jewellery and personal effects is stripped out. As well as the basic set of risks, you l should also receive the liability cover that is attached to the ownership and supply of the contents to the tenant. It is worth remembering that you are not responsible for the tenants contents. They will have to make provision for their own cover as you have no insurable interest in their belongings. Covers do vary from one insurer to another and you should always study the Key facts documents.
This cover is available as either an addition to a buildings policy or as a stand alone contract. From all the landlords we have encountered and from our own personal experience, the level of contents placed in a rental property is not always that significant, often it is just several thousand pounds. Arranging a stand alone policy can prove quite expensive as many insurers have minimum premiums which can result in a disproportionate charge. It thus seems that the cheapest way to obtain contents cover for your buy to let, is to add it to a buildings policy wherever possible. Of course, this is not always a valid option, particularly when the property you own is a flat and the freeholder takes care of the building insurance. It is highly unlikely that you will be able to add contents cover to this arrangement.
The cover available does not vary too much from the policy you would expect to receive for your own home. All the usual risks are included although certain sections afforded by a standard policy are removed. Cover for valuable items is usually deleted as is cover for personal effects, most providers want to make sure that they’re only covering standard items such as furniture & bedding, There may also be some restrictions on electrical items especially portable electrical appliances and it is important to read the policy Keyfacts to make sure the cover you are contemplating buying suits your needs.
Unlike landlords building cover, you are not obligated to buy this type of cover and in view of the often low sums insured many landlords simply don’t bother. However, unless the policy wording you buy has a fairly wide liability section, you will need this cover to provide you with the liability insurance which is attached to the ownership and supply of the contents. It may seem a little far fetched but there is a possibility of a tenant injuring themselves on an item of contents that you supply and wanting compensation. The liability section of the policy will also include the cost of defending these claims and for this alone, it makes the policy worthwhile.
Calculating your sum insured on which the premium is based is fairly straight forward, you simply need to tot up all the replacement costs as per your inventory. Although, the property is rented, most insurers seem fairly happy to provide cover on a new for old basis although wear and tear will of course be excluded. The range of perils of offer can be extended to include Accidental Damage but it would seem that only a handful of insurers are prepared to consider the risk of malicious damage by tenant. Perhaps when calculating your costs, you can consider the costs and likelihood of this event happening. Premiums to a certain extent are based on the area in which the property is located, unlike standard home policies, much less emphasise is placed on security, mainly as in a tenanted property, it is difficult to enforce and of course, the insurers are not going to cover valuable items. There is usually a policy excess, £150 to £200 seems typical and this helps keep premiums down by preventing policyholders from entering small claims.
If you are a landlord supplying furnished or part furnished accommodation, make sure the the tenant is fully aware of their responsibilities to get their own cover. As landlord you have no responsibility or financial interest for the tenants contents, if they decide to bring their own furniture in to the property, then they must buy their own cover.