Top 5 things to be aware of with your Landlord Insurance
1. Frost damage - is excluded on most insurance policies. The reasoning for this is frost damage is viewed as a maintenance issue. A building should not get into such a condition that water can seep into the pipes or brickwork and cause frost damage during the winter months. If this is the case a regular maintenance programme should be implemented during the dry months to prevent this from happening.
2. Cover for malicious damage by tenants is not normally included in a standard landlord insurance policy. This requires additional cover to the standard policy which you must ask for. Malicious damage is the causing of intentional physical damageto, another person’s property – basically a crime. Some examples of what is considered malicious is vandalism, deliberate fire/explosion to the property, theft of building fixtures (i.e. pipes, boiler). The police need to be notified and a crime reference number needs to be submitted to your insurance company for you to claim on this sort of cover.
An example of a malicious damage claim would be where the tenants have intentionally caused extensive, and sometimes catastrophic, damage to the property, converting the home into a cannabis factory.
3. Unoccupancy – Most insurance policies try to accommodate the common situation of property sitting unoccupied for a short period of time. A standard policy allows for a property to be vacant for up to 30 days before the insurance company needs to be notified that the situation has changed. For properties vacant for longer than 30 days, insurers must be informed of additional cover agreed – some insurers may not be able to offer this cover.
4. Wear & Tear – this process does not happen overnight but takes place over time. It can be described as the gradual deterioration of an object and is not an insurable risk but a natural process that takes place over time. Insurance policies cover against damage or loss from an insurable risk or event. Examples include – storm, fire, theft, accidental damage, earthquakes, etc. It is the policyholders responsibility to maintain the condition of the property and keep it in a good state of repair.
5. Loss of Rent – If the landlord has agreed for the tenant to not pay rent because there has been damage to the property, but not necessarily causing the property to be deemed uninhabitable, landlords cannot assume this will be covered. In order to claim for this the property must be uninhabitable for the tenants.
Another example of when loss of rent is not agreed is if the property must not be uninhabitable due to damage or flooding meaning that the tenants have to move out. Policyholders can only claim one or the other.