Landlord insurance is a must

by Sarah Ashcroft

Landlords need to go beyond risk assessment forms and carrying out a property inventory to protect their assets. While these things are essential documents to go with a tenancy agreement, landlord insurance has been proven to be invaluable, according to Leaseguard.

A spokesman for the firm points to the recent riots across English cities as sign of the importance of proper cover. Insurance will guard against malicious and accidental damage by the tenant and provide liability cover.

"It is important to get it right; get the right policy with the right amount of cover. You can't really scrimp and save and say that it is only worth £120,000 because if it does burn down, then that is all you are going to get," the spokesman added.

It comes after Defaqto released data on the wide variation among landlord insurance policies, highlighting the need to look carefully at the wording of the policy.

Virtually all buy-to-let policies (99 per cent) covered landlords for properties being empty, while under half (47 per cent) protected them against malicious damage by tenants.

However, landlords can do something else to guard against damage, whether malicious or otherwise. Alison Bannon, franchise development director at Right Estate Agents, explained that getting the right tenant is "vitally important".

"It could take over a year to get a tenant out and they could trash the property as well, so it could break the landlord - they could get repossessed in the meantime," she said.

As such, Ms Bannon thinks that many landlords are being much more stringent with their tenant checks. "With the fact that it is very difficult to get tenants out, I think letting agents have become much more thorough when doing their checks," she added.

Landlords could even ask for a CV from prospective tenants to gather more information before they sign an assured shorthold tenancy. One in 20 candidates for a rental property now provides landlords with a CV, according London letting agent ludlowthompson.

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Published on: November 24, 2011

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