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The buy to let insurance is a policy made specifically for those who invest in property so they can create a revenue stream by leasing out sections of their property to a third party. This cover can be for the investor with a single house to let or one with an entire block of buildings with multiple flats.
For some, the terms buy to let and landlord are the same, but they can be misleading. Most relate to a landlord as the person they hand the money to when they let out a flat. The term buy to let is used more by investors of property as it actually describes their reason for making the investment. In the insurance business sector, the terms buy to let and landlord insurance are the same types of cover.
There is no law in the UK requiring landlords to have a buy to let insurance policy. What investors will encounter is if they borrow the money for the property they intend to let out, the mortgage policy they sign will require landlord insurance.
The property this type of cover will not be the primary residence of the owner, but instead occupied by a third party. This can be a stand alone house, one or more row houses, an apartment or even an entire building with multiple flats.
The standard policy for the investor of a home to let will include building and contents cover. The building and contents cover will provide funds for repairs if the building is damaged by fire, storm, vandalism, explosions like a gas main bursting, earthquake and even if a tree falls on the building causing damage. For more details, there is building insurance for flats.
The contents cover will include items the owner of the property places in the flats they let out and general units used in the building like boilers. The most common are fridges, stoves washing machines, dryers, HVAC units and like items. This part of the policy will either take into account depreciation of the items or it can replace old for new.
Considered the most important add-on to a buy to let insurance policy is public liability cover. This protection will handle the legal costs if a third party files a claim that they were injured or became sick on your property or because the property owner neglected to prevent the incident. This cover will also pay out any settlements made in the case. For more information on this subject, there is what is landlord liability insurance?
Repairs to building maintenance items are another very common part of a buy to let insurance cover. It will provide funds for repairs and maintenance of items that make it possible for the building to be safely occupied. This can include repairs and upkeep of boilers, HVAC systems, stairs and hallways in common areas, electrical, water and gas lines, carpeting in common areas, locks and lighting fixtures in common areas.
For landlords that hire employees, there is employer liability insurance required by law. This is to cover the costs if an employee is injured or becomes ill while on the job. The number of employees and their job descriptions varies depending on the size of the property and makeup of the building. These employees can be rent collectors and caretakers that live on the property to handle the day to day operations of a large building with flats. Custodians are also common to handle the daily maintenance of the building, including the ground clean up and trash collecting.
Income cover is a policy that provides funds when a flat or multiple flats are vacant and no rent is being collected. The reason can be for economic reasons, but what is not covered is if the flat is uninhabitable due to the neglect of the landlord.
To save on the premium of a buy to let insurance policy is possible by avoiding items that could lead to a claim being filed. To help prevent or reduce the cost of damage by fire, smoke detectors in the building's common areas and the flats are recommended.
Proper maintenance of the building, the grounds, the machinery like boilers and a record of it will also help reduce the number of claims and keep the building in the best possible condition for the tenets to use.
There is a lot of responsibility when making an investment in a property where buy to let units are purchased to create a revenue stream. By having the right buy to let insurance will reduce the risk of the investment so the revenue can flow. They can be for one building or multiple property landlord insurance policy.
Many insurers offer BLT insurance and finding the best buy to let insurance policy can be a challenge. Spend time doing some upfront research. This could include joining property forum and listening to the experience of other landlords looking for the same type of cover. We can also help by providing you with multiple quotes from a range of brokers that specialise in buy to let landlord insurance.