Fifth of landlords don’t bother with buy to let insurance

Nearly one in five property investors spurn taking out specialist buy to let insurance even though standard home insurance fails to protect letting properties.

The figure was revealed in recent survey which also discovered repairs are one of the biggest expenses for property investors at £2,848 a year and that much of the cost could be reclaimed against landlord insurance.The survey looked at landlord expenses – and found on average they pay out £8,256 a year on running private rental properties, including mortgage interest.

The study also revealed the average private landlord owns 5.3 buy to let homes and earns an average £94,000 a year.

For many, specialist landlord insurance was the next largest cost after repairs – averaging £1,329 a year or 1.4% of gross rents a year.

Landlord insurance can bundle buildings and contents cover with a rent guarantee that pays legal costs and rents while evicting problems tenants or those behind with rents.

“Landlords should always take out the right cover for their investment properties. Ordinary home insurance is not designed to cover a buy to let. Landlord insurance also offers useful add-ons, like rent protection if the letting property can’t be rented out because of an event like fire or a flood,’ said Jazz Gakhal, of Direct Line.

“Good landlord insurance also has public liability cover, sometimes called property owner’s liability insurance as standard, as a landlord could be held liable for someone injured on the property or damage to neighbouring property.”

Other landlord property business expenses that amounted to around 20% of annual running costs included letting agents fees ranging from 8.9% to 12.6%.

Tenants should speak to landlords to ensure public liability cover is in place as the insurer is likely to pay out for alternative accommodation in the event of an accident at the rental property.

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2 Responses to Fifth of landlords don’t bother with buy to let insurance

  1. RentFair says:

    Many of the major buy-to-let lenders used to offer their own specialist landlord insurance. It’s a good idea but many landlords do not take it out because the premiums tend to be higher than standard insurance, eating into margins. I am surprised that more letting agents haven’t developed their own insurance products to offer as part of the lettings management service.

  2. Richard says:

    This is a real problem with some Landlords and it really is quite simple, they think that the standard home insurance contract will cover them for their rental property and with premiums so low with some ‘online’ direct insurers you can see why some of them take the chance and buy it.
    This is why a broker is worth their wight on gold and buying direct isn’t always the best way, I have found that landlords insurance is no more expensive than than a home policy if you know where to go.

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