Landlords urged to look at insurance policy small print

Landlords need to take a close look at the small print of their insurance policies.

The warning comes from independent financial research company Defaqto, which analysed 87 different buy-to-let insurance policies and found startling differences.

Of ten key features that a landlord might look for, there were wide variations in what was included as standard and what was available as an optional extra.

Even though unoccupancy period, ie insurance cover for when a property is empty, is a standard feature on all policies, the time covered ranged from one to 120 days.

Loss of rent cover was standard on 86% of landlords’ insurance policies, but 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.

“In addition, landlords need to understand the level of cover actually offered by a policy – as although the risk may be covered, the level of cover provided varies widely.

“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.”

Defaqto’s gives star ratings for buy-to-let insurance policies, depending on how comprehensive they are.

www.defaqto.com/star-ratings/buy-let-insurance