Adequate Insurance is Key

September 7, 2011 | Author

Author Julie Hanson

A house is one of the biggest purchases you will ever make. Particularly if you are a property investor as you may have many properties within your portfolio. It is important to make sure you have the relevant cover for all of your properties.

It’s so easy to overlook the importance of having the right insurance cover. You need to have buy to let insurance rather than a basic household policy. If you have a basic policy you will probably not be insured adequately. This is really taking an unnecessary risk.

Landlords Insurance

Landlords or ‘Buy-to-Let’ insurance is quite different from a standard home insurance policy in lots of ways. One key element of cover is the unoccupied property limitations. On a standard home insurance policy this is 30 days. So if you leave your home unoccupied for longer than this, your insurer can refuse to handle a claim. Some companies offer up to 90 days cover for unoccupancy on landlord policies.

If your investment portfolio contains student properties, this extended unoccupancy is particularly useful over several summer months, when students might go home. Landlords should check carefully the levels on their policy.

Specialist Insurance

cheap insurance for the over 50’s with Castle Cover

You can get cheap insurance for the over 50’s with Castle Cover. Homeowners over 50 are especially likely to save more money if they choose a policy specializing in their age group, as they tend to be classed as lower risk and pay less as a result.

Another point to mention is that you should inform your mortgage company if you intend to let out your property. Failure to do this could leave you in a difficult position and could result in your insurance being invalid.

Factors that affect the premium

If your properties have factors that attract more claims, or you personally have a high claims history, then your premiums will be higher.

Typical factors would include:

The age of your property
The property location
The Sum Insured
The types of tenants you let to and the type of property: generally HMOs and LHA tenants are deemed higher risk.

You can also ask your insurer if they do a discount for insuring a lot of properties with them, as some insurers do a portfolio package.