UK Landlords with Buy-to-let Property Should Not Scrimp on Insurance

Insurance is a part of everyday life whether it is for our cars or our homes, but landlords with buy-to-let property who are neglecting to take out appropriate policies to protect their investments run the risk of ruin.

The Zurich Property carried out a survey recently, and the findings suggest that economising on insurance is a dangerous game. Yields may be higher in the short term, but a problem not covered by the insurance could wipe out any profit margins.

The most common cause of loss to investors in the past few years has been water damage - nearly half of reported claims for this period have been from this type of incident. If one looks at the average spend after escaped water damage it is far higher than the second most common complaint of malicious and accidental damage - £1,760 per claim compared to £1000. More unpredictable and less frequent, but higher on the cost hierarchy, is storm damage at £2000. Unsurprisingly fire loss is the most costly incident to deal with at a staggering £10,500 - but fortunately it is a less frequent occurrence.   

The recent revamping of the Regulatory Reform (Fire Safety) Order (as previously reported on Letting News) and a report by ABI (Association of British Insurers) on flood defences highlights the need for buy-to-let property owners to make careful assessments when identifying risk and sorting out their insurance. Simple issues like water pipes freezing whilst tenants are away can cost the landlord, or indeed the tenants themselves, unnecessary money. In addition, tenants often neglect to insure their own personal property - but the 'it'll never happen to me' mode of thinking is a dangerous one. A little planning can go a long way in preventing a problem - and a little insurance can give even the most forgetful of landlords peace of mind.

For more advice on fire risk assessments please visit www.pscfiresafety.com or give pail a call 01455557877 or email paul@pscfiresafety.com