Archive for the ‘landlord insurance quote’ Category

Landlord insurance policies – loss of rental income

Thursday, August 25th, 2011

A landlord insurance policy, like every other policy, can be broken down into different parts. You get the buildings, the fixed glass and sanitaryware (baths, sinks and toilets), contents, property owners liability and loss of rental income. A few polices will offer forms of legal expenses and eviction of squatters and tenants cover.

Many insurers simply provide loss of rental income at a set sum insured, usually as a percentage of the building sum insured. The usual amount is 20%. This does not mean that you get 20%, but as long as your rental income falls within this figure, you have adequate cover.

You will need to prove the rental income that you have recently received and also how much rental income is detailed on your tenancy agreement. Usually this will be a six month assured short hold tenancy agreement.

It is more than likely that you will get a  quote from an independent property or business insurance broker, such as Businessinsure. If you go through a broker, they really should offer you the best contract for the best price, from the providers available to them. This does not mean that they offer you a whole of market quote, because they may simply not have agencies with company d, e and f, whereas they do with companies a, b, c, g, h and i.

Check that your loss of rental income cover is firstly included and secondly that it provides cover for when the premsies are uninhabitable and partly uninhabitable.

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Buy to let insurance

Friday, July 22nd, 2011

If anything has seen a boom and bust in recent years, it is the buy to let insurance market. This has followed the whole buy to let bubble. I remember 25 years ago trying to get my first mortgage and facing many many hurdles. Not only did you have to prove you were a good saver, you had to provide a deposit, around 10%, and have been in permanent employment for a good few years. Then, in the late 1990’s and early 2000’s, UK mortgage companies and banks decided that they would start to offer mortgages, effectively to anyone and everything.

The 100% mortgage was born and it really was not that difficult to get yourself on the hitherto unachievable property ladder. This progresses to the buy to let market, when you could easily get finance on properties that you were going to rent out. All you had to do was say what you thought the rental income would be and this was multiplied to give you a mortgage. You still had to get a deposit, but the fact was that anyone could get two, three, four properties, really with no effort.

On the back of this, as a business insurance broker, we saw a boom in the insurance on the properties. They could not be covered on a traditional home policy and as there was effectively an income being received, even though it was going towards a mortgage, it was a business.

Then, in 2007 and 2008 it all went a bit pear shaped. The banks panicked, the markets panicked and the credit crunch entered everyones vocabulary.

This put the brakes on the whole market. Now, in 2011, we are seeing the market increasing. Landlords are reporting rents increasing in excess of 10% per annum, depending on where you are.

If you are dipping your toe in the water or you are an experienced property owner, then you need to speak to Businsessinsure about your landlords insurance. We have many providers and can cover DSS, Students, Asylum Seeker tenants and unoccupied properties.

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Renting, it’s the new black.

Wednesday, June 29th, 2011

Believe it or not, this is the phrase I heard someone utter last night. Bumped into a mate who was telling me about his recent moves, he has lived in about three properties I can think of in the last year. He was extolling the virtues of renting to me, in reality he was simply moving from property to property to try and leave behind some of his debts. He was hoping that if the companies couldn’t find him, then they would write off his large credit card debts. Time will tell whether this works out for him, I doubt it very much.

But he did say that renting was the new black and everyone was doing it. Obviously not everyone, but I got the drift. He was telling me that the benefit was that you did not need to worry about maintenance or repairs. If you got a burst pipe you just phone up the landlord and demand it is fixed.

When we moved house in 2007 the recession did not exist, we were told it was a credit crunch at that time. The mortgage market was balanced precariously at the time and although we were buying in Scotland, which has a more stable property market, the chain we were involved snaked throughout England. There were 7 different properties being bought and sold and the whole chain was supported by a first time buyer. Thankfully it all went ahead with just a few hitches.

At the time we considered getting a buy to let mortgage on our old home, in case we could not sell. This is now commonplace, accidental or unintentional landlords are springing up all over the place. Now some of them will have demanding tenants like my mate. If they do, they need to make sure that the have a suitable landlord insurance policy in force. Therefore, when the tenant phones up and demands x or y is fixed, it is relatively easy to speak to your business insurance broker and, as long as you get a couple of estimates quickly, you can get the works undertaken pretty quickly.

Posted in business insurance, landlord insurance, landlord insurance quote | Comments Off

Renting, it's the new black.

Wednesday, June 29th, 2011

Believe it or not, this is the phrase I heard someone utter last night. Bumped into a mate who was telling me about his recent moves, he has lived in about three properties I can think of in the last year. He was extolling the virtues of renting to me, in reality he was simply moving from property to property to try and leave behind some of his debts. He was hoping that if the companies couldn’t find him, then they would write off his large credit card debts. Time will tell whether this works out for him, I doubt it very much.

But he did say that renting was the new black and everyone was doing it. Obviously not everyone, but I got the drift. He was telling me that the benefit was that you did not need to worry about maintenance or repairs. If you got a burst pipe you just phone up the landlord and demand it is fixed.

When we moved house in 2007 the recession did not exist, we were told it was a credit crunch at that time. The mortgage market was balanced precariously at the time and although we were buying in Scotland, which has a more stable property market, the chain we were involved snaked throughout England. There were 7 different properties being bought and sold and the whole chain was supported by a first time buyer. Thankfully it all went ahead with just a few hitches.

At the time we considered getting a buy to let mortgage on our old home, in case we could not sell. This is now commonplace, accidental or unintentional landlords are springing up all over the place. Now some of them will have demanding tenants like my mate. If they do, they need to make sure that the have a suitable landlord insurance policy in force. Therefore, when the tenant phones up and demands x or y is fixed, it is relatively easy to speak to your business insurance broker and, as long as you get a couple of estimates quickly, you can get the works undertaken pretty quickly.

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Landlord insurance – loss of rental income cover

Saturday, May 7th, 2011

We are currently going through a very warm period in the UK, forest fires are everywhere, with many unfortunately started deliberately.

But, as a business insurance broker, we are still dealing with the latter end of some of the harsh winter claims. It may seem a distant memory, but it is not that long ago that we were advising everyone to be careful of burst pipe claims. The winter of 2010/2011 has gone down on record as the worst for burst pipe losses that I can remember. The reason we are still dealing with the remnants of the claims is because of the loss of rental income cover.

If you are a landlord and have a landlord insurance policy, you must, without fail have cover for rent. Too many insurers only offer this as an option and, when you compare the quote with and without the rent, people do still choose to take the cover without rent. It only adds 5 or 10% to the premium and is always, always worth adding. We have one house, where the owner was getting £350 per week rent. A pipe burst in the attic, when the tenants were away for Christmas. The three storey house was, for want of a better word, completely and utterly trashed. Three floors were removed to prevent the whole building collapsing. The works are due to complete about July time and the owner is due to rack up a loss of rental income claim of around £12,000 on top of the £40,000 repair costs.

When we see extreme examples like this, we always thingk it is wrong not to have loss of rental income cover. If you have a policy without it, please give consideration to adding this, whatever the cost. As always, speak to your business insurance brokers as they are the experts in the field, they can get the cover added or look for a cheaper alternative with a different insurer.

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Landlord insurance – contents cover

Thursday, May 5th, 2011

Landlord insurance policies, whilst based loosely on a standard household policy, do differ in many ways. With your home, you are much more likely to have one policy that covers the buildings and contents together. Whilst you can split them, most insurers will actively encourage you to place them both together, with different discounts available for the combined cover.

As landlords policies tend to be issued by a commercial insurance company, there are, as you would expect, differences. The main one being that you can obtain cover for loss of rental income (see Saturdays entry).

The other main difference is that you do not tend to get contents automatically included. With the vast majority of let properties being unfurnished, you would expect, quite rightly, the tenant to insure their own contents, because you (as the landlord) do not have an insurable interest in their TV, settees or clothes etc.

However, who is responsible for the carpets, vinyl, linoleum, curtains and possibly white goods in the kitchen? You, as a landlord, are responsible for these items and, importantly, they do not fall under the definition of buildings. Any flooring that can be picked up (even carpets) and moved falls under the definition of contents. It always has done and always will.

We always recommend to customers looking for a new quote that they include contents, even if it is only for a few thousand pounds. It makes such a small difference to the premium that it is foolish to not insure it. But you would be surprised at the number of people that do not want it, even for an extra fiver on their quote. Then, when they have a burst pipe claim and the carpets or curtains are damaged, we have to go through the process of telling them that the cover does not apply as they only have buildings cover.

We do try, and as a business insurance broker, are obliged to point out to the customer their cover requirements. If you need a quote, please always listen to the recommendations of your broker.

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Landlord insurance prices – rough idea

Friday, March 4th, 2011

When we are talking about landlords insurance, this covers four main areas. The building itself, any contents you leave in the property, property owners liability and loss of rental income. There are other additional covers, but 99% of policies will allow you to include these four items.

As we have seen in the press this week, the number of people renting has increased by nearly 40% in the past two years. This does not mean that we are going to get a return to the boom time of buy to let (remember when you just had to phone your bank and they would give you £100k to buy a city centre flat….).

What it does mean is that the sensible property investor, with a large deposit and a good idea of the actual rental income they will receive, can now approach their bank to get some proper finance. Whereas in the past two years this has been very difficult.

As part of this process, the bank will ask you many things, including what you expect the annual insurance costs to be. Now, the only way of getting a proper confirmed written quote is to speak to a business insurance broker. There are of course numerous sites that give quotes, but you really are better off speaking to a human being.

Now, that is how you get a written quote, but what if you just want an idea? The following is not in any way meant to be a binding quote, but it is an idea of the premium you are likely to be charged annually.

The premium is calculated based on the re-building sum insured. This is not the purchase price but the cost to rebuild. If it is mortgaged, you will have a valuation from the mortgage company. Take this figure and apply a rate of 0.20%. Of course, it depends where the property is, your claims experience, the construction and a whole host of other factors, but this will give you an idea. For a £100,000 house you would be looking to pay around £215.00 per year, once the insurance premium tax is included.

For contents, you can use a percentage figure of 0.75%.

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Landlord insurance – whats not in the definition of buildings?

Thursday, February 3rd, 2011

As a business insurance broker, we are legally obliged to provide as much information as possible to our potential clients. This does involve, at times, the provision of significant amounts of paperwork. For every single quote we provide, we have to send a written quotation, a copy of our terms of business and a summary of the insurance cover.

This can add up to over 50 pages of fairly detailed text. As we speak to every single customer that obtains a quote from us, we do discuss exactly what is, and what is not, included in the quote.

It is worth stating, again though what the definition of buildings in a landlord insurance quote. To simplify things, we tend to say that the buildings covers everything that you would not necessarily take with you when you move. The purpose of this definition is to explain that everything that is effectively movable, therefore does not fall under this definition.

The point you need to consider as a landlord or property owner is whether you are required to cover the following items:-

Carpets, curtains, lino/vinyl flooring, white goods (movable and fixed) and any furniture.

If you are letting the property furnished (full or in part) then you need to insure for contents. If you are letting unfurnished, then you need to add to your policy a contents section for the carpets, curtains, movable flooring and white goods that are not fitted. Even when you look at a single bed flat, this can add up to £5,000. You have to consider what the replacement cost, as new, would be.

Please do not think that buildings should include carpets because you would not take a carpet with you. Unless you can provide that the carpet is wholly glued to the floor, then it is part of the contents. All insurers consider buildings and contents the same. Even if you have to pay an extra £20 or £30 per year to add contents, it is worth it in the event of a loss. You cannot ask the tenant to insure the carpets or curtains unless they actually own them and this can be proven.

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