Insurance secrets

The 6 Deadly Insurance Sins That Landlords Make

Property insurance can be confusing. By learning more about the insurance-based mistakes commonly made by landlords, you can avoid falling into the same trap. In no specific order, here are six mistakes that we’ve seen landlords make when it comes to insuring their property portfolios…

1. Cost-cutting

Looking for ways to reduce the cost of insurance considerably can be tempting, but it can also be very risky. If you opt for unrealistically cheap cover, you risk making substantial losses if something unfortunate does occur. In any case, the conditions of your mortgage will state that sufficient cover is in place. Unbelievably, some property owners don’t purchase landlords’ insurance at all.

2. Understanding the full extent of your cover

Do you have a comprehensive understanding of what needs to be covered? Naturally, you will try to find the best deal when insuring your property and sometimes this leads to taking out insurance cover that is less than you really need. You would never consciously do this, but it’s easy to be lured in by prices that look great on the surface but when you look deeper, don’t give you the appropriate cover that you need. Insurance companies expect you to have your property insured for the total rebuild cost, and your claim will be reduced in direct proportion to your ‘under-insurance’. This is where carrying out due diligence is required.

3. Understanding how long your cover lasts

If something disastrous does occur to your property like a major fire or flood, you may be left seriously out of pocket if your insurance cover runs out and it takes longer than you thought to repair or rebuild the property. The period of cover you must have needs to give you enough time to clear debris, get new plans drawn up, arrange for any planning approval and building regulations, obtain quotes for the work and then get the job done. As you can imagine, these processes can dramatically lengthen the time it takes to make a property habitable again, so it’s always best to prepare for worse-case scenario and ensure that your period of cover is sufficient.

4. Not taking advantage of the cover available

It’s important to take out as much cover as you need. Many landlords have fallen into the trap of thinking that it’s not possible to cover themselves for certain eventualities. Cover is available for everything from accidental damage and injuries to third parties, houses with a substantial number of passers-by, loss of rent, legal expenses and more. Plan your insurance needs thoroughly.

5. Not being specific about insurance requirements

Not all landlords’ insurance is created equal, so it really is important to be specific when talking to a broker or provider about what your needs are. A good example of this is not disclosing appropriately the types of tenants that reside in your properties. If your property is occupied by DSS tenants or students for example, this will have a bearing on your insurance policy, so this is something that you need to make known to your insurance provider. In addition, not all landlords choose to insure their own belongings inside a property, but if you do have carpets, white goods, fixtures and more to protect, it’s certainly worth investing in the relevant cover because this isn’t always automatically covered by your policy. Another thing to look out for are periods of un-occupancy at your property. Speak to your insurance provider about covering your property for void periods to ensure that you have peace of mind. In summary, you need to be clear about the real insurance you need so that you have no regrets at a later point.

6. Thinking homeowners’ insurance will suffice

Last but not least is thinking that homeowners’ insurance will suffice. This is really a school-boy error and it happens more often than you might think. It’s a very bad idea to insure a rented property in the same way as if it is simply an owner-occupied home. This will invalidate your insurance, and there is no chance your claim will pay out. Avoid doing this at all costs.

We hope you have found this useful. Don’t make the mistakes that many other landlords have made when it comes to insurance and have later lived to regret their actions. At Thompson Insurance Brokers, we can get you insured for virtually any eventuality. Simply call Adam Thompson on 0121 796 0123. You can also send a message to Take advantage of our expertise.

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