If you own more than just a single buy to let property, you might want to consider the benefits of landlord portfolio insurance.
Appropriate landlord insurance is essential, of course, for each one of your buy to let properties, but just as the title suggests, landlord portfolio insurance covers all of them under a single policy.
The following is a brief guide for buyers.
The benefits of multiple property insurance
Most suppliers of goods and services offer attractive discounts if you buy more than one of their products. This is also true of insurance providers, who often discount the price of premiums when more than one item is insured – such as multiple buy to let properties.
There is a further advantage with property portfolio insurance, in place of separate insurance policies for each dwelling. If you arrange your landlord insurance for each individual property, you are likely to have separate renewal dates throughout the course of the year. So that you do not run the risk of overlooking a renewal date – and leaving any one property vulnerably uninsured – you need to monitor several different policies and renew them when they expire.
With landlord portfolio insurance, all the properties remain safely insured throughout the year, without the time, hassle and therefore administrative expense of keeping many individual policies under constant review.
Many portfolio property insurance providers will allow you to insure a mix of different property (and tenant) types, all under one policy. So if you have mixed-use properties, HMO’s and / or residential homes, for example, these can all be protected with just one policy.
What does it cover?
Landlord portfolio insurance keeps every one of your properties covered in just the same way as if each one was insured separately. Although policies may vary quite widely, common core elements of cover therefore include:
- this is the component which protects the very structure and fabric of the buildings against potentially serious loss or damage from such events as floods, explosions, fire, storm damage, impacts, theft and vandalism;
- the total building sum insured needs to reflect an accurate, up to date estimate of the rebuilding costs in the event of a worst-case scenario in which your properties are totally destroyed and need to be reconstructed;
- the index of reconstruction costs maintained by the Royal Institute of Chartered Surveyors (RICS) may help you keep these estimates and building insurance requirements up to date;
- as the landlord of multiple dwellings, your properties are likely to have contents of significant value;
- these, too, need the protection of landlord portfolio insurance, to ensure you have the financial wherewithal to repair or replace lost or damaged items you own (your tenants, of course, are responsible for insuring their own possessions);
Landlord liability insurance
- this is a specific form of liability insurance – the general principles of which are described by the Association of British Insurers (ABI) – to indemnify the landlord against claims made by tenants, their visitors, neighbours or members of the public who are injured or have their property damaged and hold you responsible as the landlord;
- given the potential for any such claim to assume substantial proportions – especially if personal injuries are concerned – landlord liability insurance typically provides at least £1 million of indemnity;
Compensation for loss of rental income
- if any of your let properties becomes uninhabitable following a significant insured event, multiple property insurance may also provide compensation for the consequent loss of rental income.
If you are the landlord of any property, appropriate insurance is essential to protect the building and your buy to let business. If you own multiple properties, the benefits of landlord portfolio insurance offer a way of saving money on this important overhead cost.