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Buy to let investment

Household insurance

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There are a number of points to remember when considering buildings and contents insurance:

Who insures what?
Both buildings and contents insurance remain your responsibility when you are letting out your property. However, in the case of leasehold property, buildings insurance is almost always arranged by the freeholder and included in your service charge.

Even if you are letting your property unfurnished, you still need to get contents cover to protect the basic items. This often requires a specialist policy that protects things like the carpets, curtains, appliances and other fixtures or fittings. You should make sure that it covers you against damage caused by the tenant. If you are letting the property furnished, you only need to get insurance cover for those items which you have provided.

You have no obligation to insure the possessions of the tenant. He or she should provide contents insurance cover for their own possessions prior to moving into your property.

Existing homeowners
If you already own the property and have an insurance policy, you must tell your insurers in writing that you intend to let out your property. You may find that they want to impose certain restrictions on your cover or increase the premiums whilst the property is let. You may well find that your normal domestic insurance policy will not cover you for letting out your property, which is often classified as commercial.

In fact, there are quite a few well-known household insurance companies that will not deal with rented property at all, with there being an increased chance of this if the property is rented to students. You can find specialist insurance policies designed especially for landlords, with particular provisions to cover rented property. Try the insurers in SiteFinder as a good starting point.

General points
Before you rush out and buy your insurance, why not read our 9 page guide to the ins and outs of household insurance policies. Read it here.

Briefly though:

  • Always read the small print.
  • Don't sign anything you don't understand.
  • Shop around for the most competitive quote.
  • Don't just buy on price - look at the extent of the cover and the exclusions.
  • Make sure that the policy includes periods between lets when the property is vacant.
  • Don't pay for what you don't need, but make sure you have adequate cover for what you do need.
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