Going beyond a property inventory: contents insurance

by Sarah Ashcroft

Tenants can leave a rented property in a bit of a state at the end of their contract. Landlords letting to students, in particular, can suffer financially from having to replace furnishings and repair fittings and fixtures.

A property inventory is the first basic step to take. This lets the landlord list all the items in the property and their condition, allowing them to hold on to part of the tenant deposit when they leave if necessary.

With tenancy agreements lasting longer than ever, a property inventory is vital, according to the Association of Residential Letting Agents. "This increase in the length of tenancies will inevitably lead to greater wear and tear in rented accommodation and fewer opportunities for downtime between tenancies for landlords to make improvements," explained Ian Potter, operations manager at the organisation.

But a rental inventory and deposit can only go so far and some landlords take out specialist buy-to-let insurance to cover furniture and the like. David Lawrenson, private rented sector expert at LettingFocus.com, believes landlords need to ask themselves a number of questions about how much cover they think they will require.

"Most landlords have a minimum level of furnishings, so they ask themselves whether it is worth paying for the additional contents insurance on top of the buildings premium - although some insurers' building insurance cover will include some small elements of contents insurance as standard," he explained.

He noted how a lot of landlords have a very small level of furnishings in their property so that they can get their "ten per cent wear and tear allowance".

Mr Lawrenson continued: "If they have got a flat and are letting it out, then there would be some degree of cover under the freeholder's block insurance policy, but sometimes they can be a little bit limited in terms of some of the degrees of protection.

Research from Defaqto indicates landlords should read the small print before taking out an insurance policy. It found that nearly 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.

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Published on: May 11, 2012

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