We all know the importance of having buildings insurance on buy to let properties, but unfortunately many landlords spend more time looking for cheap premiums and not enough time considering the finer details of the policy they are buying. Sadly, as one landlord found out to his cost, failing to properly assess the rebuild cost of a property could seriously leave you out of pocket should the worst happen and you need to make a claim for extensive damage.
Imagine the damage caused by fire: even a relatively minor chip pan blaze in a kitchen can cost thousands of pounds to put right, and if the building burns down to the ground, you are probably looking at hundreds of thousands. Of course with the right insurance policy in place, your cover will be sufficient to pay for the property to be rebuilt, but if you have been under-insuring for years any shortfall will come out of your pocket. After all, you don’t want to find yourself in the shoes of the landlord mentioned in a report I read in the Independent: he ended up 100k out of pocket following a 400k claim for fire damage—all because he under-insured his property for a number of years.
But although effective insurance is essential, you do need to ensure your properties have effective fire safety provisions, including wired in smoke detectors, in place. It is also sensible to include fire precaution clauses into tenancy agreements since at least 15% of all claims for fire damage arise from burning candles and cigarette smoking.
