Landlords urged to check insurance cover

Landlords have been urged to check their buildings insurance in the light of the increase in VAT imposed at the beginning of last year.

With wintry conditions on their way, and the possibility of claims from storm damage or burst pipes, one landlord insurance company says that landlords should check that their cover has been adjusted to allow for the higher rate of tax.
 
Nigel Atkinson, head of PropertyRisks, said: “Many insurers index-link buildings cover, but it is advisable to double check the sum insured. 

“If faced with a bill for building repairs from a VAT registered tradesman, the cost will effectively be 2.5% higher than just over a year ago. As landlords are unable to reclaim VAT on repairs because their letting income is exempt, the building sum insured needs to account for the higher tax level.

“If the buildings cover has not been increased, this will be a cost they will have to bear out of their income.”
 
He added: “Over the last two years, property owners have been three times more likely to have an escape of water claim than a claim for theft. 

“Storm damage is another risk and we have already seen some extreme gale conditions in the north and in Scotland, so the best advice is to check that sums insured are sufficient to allow for increased repair costs.”