Let property insurance is not something that’s more or less identical between policies – apart from the price.
There may be very substantial differences between policies and it would be prudent to be sure you know what they are in advance. Discovering some of the points below for the first time when you’re trying to make a claim, might result in some disappointment!
This is one of “the big ones” in let property insurance.
It might surprise you to know that this is not included automatically in all policies. Some might not cover it at all and for others, it may be an optional extra cost.
A linked issue here is that of “heave”. If you’re unsure, that is roughly the opposite of subsidence, being ground that’s being driven upwards by geological forces of more typically, tree roots etc. Some policies might cover subsidence but not heave.
Insurers naturally recognise that your tenants constitute a risk in several different respects.
Some, using their past claim statistics, might segment tenants into risk categories which designate some tenants as being high-risk in terms of them being responsible for claims of one sort of another. Some may designate groups such as asylum seekers, students and housing benefit claimants, as “high-risk”.
If they do, they may exclude them from cover or require additional premium if you decide to let to such tenants.
Policies will typically carry what’s called “excess”. That’s the sum the insurer will require you to pay towards the cost of any future claims. It’s sometimes also called “the first part of a claim”.
The amount involved can vary a lot. That’s worth being clear on before you decide that a policy is low-cost.
Loss of income
This type of cover helps in situations where, for example, an insured peril has been successfully claimed for but which also means you’re unable to let your property while repairs are being undertaken.
During such a time, your income from the property might be zero. This type of cover can help bridge the gap.
This has already been touched on under “subsidence” above but it also needs to be considered in a broader context.
Almost all policies will offer buildings cover but this isn’t a standard term. For example, some policies might offer buildings cover for “FLEA” (Fire, Lightning, Explosions and Aircraft).
Now the chances of your property being hit by either an aircraft or lightning might be very small but the risks of say flooding (external or internal) might be much higher. Yet under FLEA provisions, it won’t be covered.
The message is – read the definitions of what is meant by “buildings’ cover” very carefully.
Again, this is hinted at above but it justifies its own category.
This peril has been headline news for some decades now. How let property insurance providers deal with it may be subject to wide variation.
Some might simply exclude external flooding cover (meaning due to natural causes like rivers or tides rather than burst pipes in your home) totally. Others might make it an optional and possibly high-cost element. Some may include it but not if you live in a high flood risk area.
Some though might include such cover automatically.
It’s not a question of which is right or wrong – it’s just important to be sure you know whether or not your property is covered against such risks.