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Buy to Let House Insurance

Specialist buy to let house insurance cover is vital for all landlords. New entrants to the buy to let market will find buy to let home insurance is a condition of their mortgage offer. Property owners renting out their house or flat risk being uninsured if they do not inform their house insurance company, mortgage lender or lessee in the case of leasehold properties. Buy to let insurance is required for residential property; alternatively, properties occupied for commercial use will require commercial house insurance.

Essentially buy to let, or landlord insurance, is made up of a range of house insurance covers tailored to suit property that is being let to tenants.

  • Buy to Let Buildings Insurance will cover the rebuilding costs of the house including, as a rule of thumb, those items which you would not normally take with you when moving house.
  • Buy to Let Contents Insurance can be arranged to cover whatever items are provided by the landlord for the use of the tenant or tenants. In the case of a furnished let this would obviously include all the furniture, carpets and curtains provided (which must meet with the standards of all the appropriate current fire safety legislation). Note that the buy to let landlord cannot provide insurance for the tenant's possessions. The tenant must arrange their own house insurance cover for their possessions.
  • Landlord Liability Insurance protects the buy to let investor against claims for damages against him by the tenant. Property owners liability insurance should also include legal cover. It is the landlord's responsibility to maintain the property in a safe and secure condition, often referred to in the policy as the 'duty of care'. If a tenant, or indeed anyone with a legitimate reason to be at the property, suffers injury or loss as a result of, for example poor maintenance or faulty wiring, he can reasonably claim against the landlord. The landlords Public Liability insurance will pay, up to a specified limit, for damages awarded to the tenant as well as the associated legal costs.

In addition to the above basic landlords insurance, it is possible to add on extra cover to standard buy to let house insurance quotes.

  • Home Emergency Assistance cover is useful for absentee landlords and will cover such eventualities as failure of the heating, hot water or electrical system, blocked pipes or gutters, leaking rooves and even pest infestations.
  • Landlord's Legal Expenses cover can be arranged which will insure the buy to let landlord against the range of potential legal expenses arising from such problems as tenant evictions and property disputes. It is also possible to insure against the risk of lost rental income during eviction proceedings, a form of insurance often referred to as Rent Guarantee.

Buy to let insurance differs from standard house insurance in terms of the amount of time the property can be left unoccupied. Specialist landlord insurance will typically allow for a longer period of unoccupancy, a provision that can be very useful to cover the property for those periods when the house or flat is left vacant between tenants.

Some landlords insurance policies do differentiate types of tenants into high and low risk categories. For instance tenants who receive benefits, asylum seekers, students and multiple single sharers are generally classified for insurance purposes as a higher risk than professional employed persons. Its therefore important to know which kind of tenant will occupy the property for which you are seeking buy to let insurance. It is also vital that an acceptable tenancy agreement is used. In practice this is usually the Assured Shorthold Tenancy.

For rented properties built before a determined year, insurers will routinely require that for buy to let insurance cover the house is subject to yearly gas appliance and electrical wiring tests.

When insuring a portfolio of buy to let properties, some landlord insurance providers will arrange cover for all the properties under one single house insurance policy. This is not just convenient but can usually also be negotiated at a discount.

There are several important points to remember during the lifetime of the buy to let insurance policy.

  • Changes in Circumstances must always be passed on to the insurer. For example, a change in the landlords circumstances, a change of the type of tenant, or a change in the costs of rebuilding or landlords contents.
  • Advice of Unoccupancy. The buy-to-let landlord must notify the insurer of any periods of unoccupancy exceeding the period of time specified in the policy document.
  • Notice of Building Works
  • . The landlord must notify the insurer in advance of any extension to or conversion of the rented property.
  • Duty of Care. The landlord must take actions to prevent loss or damage to the property and ensure that the property is maintained in a good state of repair. Security devices must be regularly maintained and used at night and when the building is unattended. Any furniture provided must meet current fire safety standards. Gas appliances must be inspected every year by a CORGI registered contractor. An instruction book must be provided for each gas appliance. All electrical fittings and appliances should be periodically checked by a qualified electrician. Records should be kept of all safety checks and inspections.

Over the last three decades with the growth of the buy to let mortgage market buy to let house insurance has become a more widely required insurance product. Competitive quotes are now available especially by searching on the web for online buy to let insurance quotes. So its worth shopping around for cheap landlords insurance.

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