Landlords need to take a close look at the small print of their insurance policies. An independent financial research company, Defaqto, recently analysed 87 different buy-to-let insurance policies and found startling differences. They found wide variations in what was included as standard and what was available only as an optional extra.
* The cover for when a property is empty, is a standard feature on all policies, however the the time covered ranged from one to 120 days.
* The loss of rent cover was standard on 86% of landlords’ insurance policies.
* Theft damage by tenants was offered as standard on only 28% and not offered as an optional extra on any of the others.
* Lock replacement following theft of keys was standard on 45% of policies, and available as an optional extra on 38%.
* Malicious damage by tenants was standard on 47% of policies, but an optional extra on only 17%.
* Rent guarantee, to cover where tenants default on rent, was not standard on any of the policies examined, but available on 39% as an optional extra.
Mike Powell, Defaqto’s insight analyst for general insurance, said: “It is important for amateur landlords to consider specialist insurance for their property portfolio as there are a number of key risks that are specific to rental situations.
“As ever, people need to focus first and foremost on the features and cover offered by policies when comparing options and not be driven by price. After all, this would be taking a major risk with their assets.”