Property inventory vital as landlords consider insurance

by Daniel Jones

The importance of carrying out a property inventory has been highlighted by a new report on buy-to-let insurance. Malicious damage by tenants is one of the major risks facing amateur landlords, according to Defaqto.

Theft damage by tenants is another risk facing landlords, further demonstrating the value of a property inventory form. Other potential problems for landlords include periods with no tenants, lock replacements, unauthorised use of utilities, squatters and rent defaults.

Research by the organisation shows wide variation in the type of cover provided by buy-to-let insurance policies. For example, 99 per cent cover landlords for properties being unoccupied for up to 120 days as standard, while none of the 87 policies assessed offered protection against rent defaults as standard.

Furthermore, malicious damage by tenants is covered by just 47 per cent of policies, while offered as an optional extra by 17 per cent. Under a quarter (23 per cent) protect landlords from theft damage. Six per cent offer this as an optional extra.

Lock replacement following key theft was found to be covered by 45 per cent of insurance policies, with a further 38 per cent offering it as an extra.

Mike Powell, Defaqto's insight analyst for general insurance, said: "It is important for amateur landlords to consider specialist insurance for their property portfolio as there are a number of key risks that are specific to rental situations."

He added: "Landlords need to understand the level of cover actually offered by a policy - as although the risk may be covered, the level of cover provided varies widely between policies."

Meanwhile, a further issue facing landlords is carbon monoxide and making sure appliance meet regulations. It is particularly important over the winter.

Stephanie Trotter OBE, president and director of the CO-Gas Safety, believes the current rules, however, do not go far enough. "An alarm should be fitted or checked as part of the landlord's annual gas safety inspection but we also think the landlord should have to have his appliances serviced, not just checked," she said.

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Published on: November 9, 2011

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