Winter storms can cause serious damage to properties, and if you’re a landlord this can mean your profits take a hit. Here are some tips for making sure you have the landlord cover you need in place this winter.
Do you have the right cover?
Landlord buildings insurance
It’s time to dig out those insurance policy documents to double check you’d be covered if your rental property was damaged by bad weather. It’s buildings insurance that can cover the structure of your building (including the roof, walls and windows) in the case of damage caused by something like a flood or storm.
Landlord fixtures and fittings insurance
If you don’t need buildings insurance - for example if you own a flat and the freeholder insures the building - then you may have fixtures and fittings insurance instead. This can cover things like fitted kitchens and bathrooms if they’re damaged by an event like a storm or a flood.
Landlord contents insurance
Landlord contents insurance can cover things like furniture and appliances, for example if you provide kitchen appliances to your tenants and they’re damaged by flooding. It’s important to note that any damage to your tenants’ possessions won’t be covered under your insurance policy: they should have their own contents insurance.
Alternative accommodation cover
Your policy may also include alternative accommodation cover, which can pay for alternative accommodation for your tenants if they can’t live in your rental property for a period of time due to damage caused by an insured event like a fire or a flood. This insurance can only pay out if you’re contractually obliged to provide your tenants with somewhere to stay: check your policy documents for specific rules and exclusions.
Do you have the right cover levels?
As well as checking you’ve got the cover types you need, it’s important to check that your cover levels are correct, and to update them if necessary. Your buildings insurance cover level should reflect the rebuild value of your property, which is what it would cost to rebuild your property from scratch, including labour and materials. Your contents insurance should reflect the value of all the furniture, appliances and other items you supply to your tenants.
This is important, because if you’ve undervalued your building or your contents, your insurer can reduce the amount they pay out for a claim. For example, your roof is damaged in a storm and needs to be repaired. When you make a claim, your insurer sees that you’ve underinsured your building by 25%, so they reduce the claim payment for the roof repair by 25%.
If the value of your buildings or contents has changed since you took out or renewed your insurance - for example if your property has been extended or you’ve provided new appliances to your tenants - you need to contact Simply Business to update your cover levels.
Check your excess
Your excess is the part of the claim that you need to pay, and it will vary depending on the type of cover, the type of claim, and the insurance provider. Your excesses should be stated clearly on your policy documents.
For example, a £200 excess on your contents insurance would mean you’d have to pay the first £200 of any contents insurance claim. If you made a £30,000 claim, the excess probably wouldn’t seem very significant, but if you were planning to make a claim for under £200, it wouldn’t be worthwhile.
Excesses can vary a lot, so check your contents and buildings insurance to make sure you understand what you’d need to pay in the event of a claim. Also remember that if you make a claim, your insurance premium (the cost of your policy) is likely to increase when it’s renewed.
Remember to keep the receipts for the furniture and other items you’ve bought for your rental property, as this will help to prove their value if you need to make a claim.
If you do come to make a claim, it’s important that you contact our claims team as soon as possible, and that you document everything related to your claim. This could include taking photographs and videos of the damage, and writing down what happened.
How are you preparing for possible bad weather this winter? Tell us in the comments.