1) Consider the risks
Have you thought about all of the potential risks and outcomes? There are many factors that need to be considered to ensure that you are truly covered if the worst comes to the worst. Think about who will be marketing the property to. Is the Buy-To-Let property going to be most suitable for a family or for a student? Different types of tenants all post different types of risks. You also want to consider the location of the property. Is the area prone to flooding? Is it in a high-risk neighbourhood that sees a lot of crime? Ensuring that you know all of the risks involved will ensure that you get a fully comprehensive cover.
2) What happens if the property becomes unoccupied?
How do you intend to manage the Buy-To-Let property during periods of unoccupancy? There are various categories of unoccupied property and each one will require a different type of cover. Categories typically include:
- Unoccupied property to be let within 90 days
- Unoccupied property to be let after 90 days
- Unoccupied property to be sold
- Unoccupied property to be owner occupied
3) Can you insure your entire property portfolio under a single policy?
Not only could this possibly be a real money saver, but it will make your landlords insurance so much easier to manage. In some cases it may be best to keep your properties separate. This is common when your portfolio is spread across different post code areas and consists of different property types such as a mix of residential and commercial, or occupied and unoccupied. This is because one insurer may have good rates for one type but not the other so any cost saving by keeping them together is lost if the insurer is not competitive for all of the properties. If you have multiple Buy-To-Let properties that are all quite similar, it usually makes good sense to insure your whole portfolio under a single policy as then it is only one renewal payment each year.
4) Get expert advice from a variety of sources
Getting expert advice from different sources will help you to assess your situation better. Insurance brokers will be able to offer you different insurance policies tailored to suit your needs, and will discuss with you your best options to make sure that you are covered for what you need, and aren’t paying more for what you don’t. An insurance broker can help you to shop around for a policy and even combined packages so that you get the best deal from a variety of different insurance providers.
5) Don’t just go with the cheapest!
This isn’t a case of going with the cheaper brand because “in a taste test between the store’s versus the major leading brand’s, no one could tell the difference”. You need to make sure that you are covered for everything that you need, which is highly unlikely when you’re only looking at the price. You need to be aware of the policy’s exclusions. For example, many landlord insurance policies will not cover malicious damage by tenant. But we do!