A good, tailored insurance policy is vitally important for every landlord.
Insurance provides you with peace of mind that you will be able to cope financially in the event of an unanticipated problem. But it is important to remember that even the very best insurance policy will not cover you against all eventualities.
There is a range of circumstances and problems that will not be covered by your insurance policy. Maintenance related issues are paramount amongst these. Even with an insurance policy, landlords still need to ensure that their property is maintained to a reasonable standard. A good maintenance regime is particularly important as the colder months begin to draw in.
Here are five common types of claim that are unlikely to be covered by your policy – along with some tips to help you avoid them.
1. Frost damage
Frost damage is seen as a maintenance issue, and is therefore unlikely to be covered by your insurance policy. Regardless of insurance, landlords are expected to maintain their properties to a reasonable standard – and this includes ensuring that they are watertight.
You can reduce the potential for frost damage by making sure that water cannot make its way in. Check piping and brickwork to ensure that they are sound. If the property is likely to be empty for an extended period, make sure that the heating is turned on regularly in order that the pipes don’t freeze. Make sure you read the section below for more information on void periods.
2. Malicious damage
Most landlord insurance policies will not cover malicious damage as standard. If you are concerned about the potential for malicious damage, you should contact your insurer and have them add this type of cover to you policy.
You should also remember that malicious damage claims will only generally be paid once the police have been notified, and a crime number has been received. You should check with your insurer to find out how quickly after the event you will be required to provide this.
A good insurance policy will take into account the potential for void periods and cover unoccupied properties. Insurers recognise that landlords are not always able to immediately fill a property, and that void periods will occur. As such, most policies will allow you 30 days’ grace before you are required to notify them of un-occupancy. If your property will be empty for longer than 30 days, you may be expected to tell your insurer. Failure to do so could invalidate your policy.
4. Wear and tear
Gradual deterioration will not be covered by your insurance policy, as it is not generally considered to be an insurable risk. You should note that wear and tear is distinct from accidental or malicious damage.
5. Loss of rent
Loss of rent cover is important for landlords – but it is important to understand that there is a range of circumstances in which it might not apply. For example, you are unlikely to be covered in the event that you have agreed with your tenant that they should not pay rent, but that the property is deemed habitable. In order for loss of rent cover to pay out, the property will have to be considered uninhabitable.