Let’s consider some of the Benefits of a Residential Landlords Policy.
Property Owners Liability is included under this policy as standard. The limit can be increased from the standard £2m up to £5m, for an additional premium. This cover is essential if someone becomes injured through a fall in or around your premises. The person may require support as a result of those injuries or may have had some loss of earnings due to their inability to work, hypothetically. If those injuries are deemed a result of the Property Owner’s Negligence, then you may have to foot the bill. This is where it is important you are insured adequately.
Trace & Access – Some insurers may cap this cover up to £5,000 or £10,000. Some insurers will have no cap. This cover is essential should you have a sub-floor leak & cover the cost of tracing the leak – think of ripping up the floor to get to the source & the extra cost this would incur. Note, trace & access is only payable when there is a valid claim or leak. The cost of which can’t be reclaimed if a floor is ripped up to find there is no leak!
Standard Perils can include cover for Fire, Lightning, earthquakes, Aircraft, Explosion, Theft, Malicious Damage, Storm, Flood, Riot, Civil Commotion, Escape of Water, Impact (by falling trees, vehicles or animals), Subsidence, Landslip or Heave. The Standard Perils on a policy can vary slightly, and therefore, we recommend you add Full Accidental Damage if it is non-standard on a policy. This will mean you are insured for what insurers determine is a sudden or unforeseen event.
Index Linking – What does this mean? When insuring your building, you need to correctly insure the amount it would take to reinstate the building in the case of a total loss. This not only includes the costs of Bricks & Mortar, but also Professional Fees, such as architectural or legal costs and site clearance costs for example. Once this is calculated, your insurer will cover this amount and adjust by a designated % determined by RICS the following year (at renewal) to consider any inflationary increases. This is called Index Linking, and is designed to ensure you do not gradually become Under-insured. Crucially, the figure needs to be correct from inception of the first policy – indexation will not work if the sums were incorrect or too low to begin. We recommend an RCA and can help you with this via our partner at heavily discounted rates.
Loss of Rent – This cover is normally standard on a landlord’s policy. It will cover you in the event of an insured perils occurring, resulting in your property becoming ‘uninhabitable’ – such as a fire or flood for example. It is essential, however, that the property is unable to be lived in for this cover to operate. Should the property become uninhabitable, the policy will pay out the Rental Income the Landlord would have received normally. It is important Loss of Rent is not confused with Rent Guarantee. Rent Guarantee will guarantee your rent if the tenant does not pay, subject to various stringent conditions.
