Q. As a Landlord of three investment properties I have never bothered with Landlords insurance as all my properties are leasehold with buildings insurance included in the service charge so I guess I feel if there was an issue with a leak from upstairs I am pretty much covered. However my wife thinks I should obtain Landlords insurance to make sure I have everything covered – what do you advise?
A. You are most certainly right when you say that the buildings insurance that you pay for in your service charges would cover the damage from a leak from upstairs. However when a leak occurs it can cause way more upheaval than you might ever care to imagine. Certainly it’s tempting to spare yourself the additional expense, especially when buy to let margins are so tight, but doing so could prove to be false economy. You might save a few pounds now but it could cost you a fortune later. Costly incidents could easily wipe out your rental profits and leave you significantly out of pocket. It’s a sobering thought but all Landlords can protect themselves from such claims with public liability insurance, which can also provide a valuable safety net against costs for damages caused by an incident involving one of your tenants – for which you the landlord might be held responsible for. Most insurers now include public liability cover in their standard landlord’s insurance policies as well as the usual contents cover.
Without some kind of protection in place if you have a leak in the apartment and the property becomes uninhabitable you would be responsible for rehousing your tenant whilst the property is made habitable. You may also think that your furniture isn’t that expensive and easily replaceable but consider damage to this as well as wooden floors and carpets this all adds up and the cost will likely be a lot higher than you first thought. Your property is likely to be your biggest investment so you need to consider protecting it. There are many insurance companies that specialise in Landlords insurance; your estate agent can point you in the right direction as often the reference companies they use have a whole department to look after this. They also offer policies for rental guarantees too which can also prove to be very useful especially in the current climate where non-payment of rent could prove to be detrimental to your cashflow