Dealing with water leak damage isn’t just costly; it can also be extremely time-consuming and disruptive – both for you and your tenants. As such, having the right insurance in place can save some considerable headaches.
As you’ll know if you compared landlord’s insurance before now, not all policies are created equal – so, it’s useful to know some of the terms you’ll find on quotes and policy documents – and look at exactly what kind of cover is provided.
How did the damage happen?
Before we dig into policy specifics, it’s important to explore the causes of water damage – and the different attitudes to water leaks that insurances companies can take.
Whether or not you’re covered by your insurance policy at all often depends on how well maintained your property’s plumbing is.
For instance, if a completely unforeseen pipe failure leads to water damage, there’s no reason to think you won’t be covered. However, if you’ve known about a leaking pipe but you’ve just suggested that tenants ‘keep topping the boiler up’ – then you might find you’re in for a nasty surprise.
Your plumbing tells a story
Despite the fact it’s hidden behind your walls and under your floors, an insurance assessor will be able to take one look at that condition of the system and make a fairly sound assessment as to whether or not it’s been well looked after.
It’s not just the condition of the pipework they’re looking at either. They’ll expect to see that that measures have been taken to protect the pipework from frost – and they’ll know the signs of a central heating system that’s been ‘topped up’ frequently.
Is your leak covered?
If you’ve renewed your plumbing when you’ve refurbished, or you can confidently say that your plumbing’s been looked after, you probably don’t have anything to worry about if you ever need to make a claim for a leak. While a gas engineer will make sure your boiler is working as it should each year – it’s also worth having a plumber check your water and heating systems on a regular basis too. They’ll help you keep ahead of avoidable problems.
It can be tempting to suggest a quick and easy solution when a tenant picks up the phone and tells you about a puddle of water they’ve found somewhere – but it’s short-sighted; water issues don’t fix themselves – and they only ever get worse.
Is your building covered?
As a minimum, your building will be covered against the damage that comes from a leak.
With recent media focus on flooding in the UK, it’s easy to forget about the chaos that a simple leak can cause – but leak damage and flood damage are usually two distinct elements on a policy.
Generally speaking, water damage resulting from a leak comes from water that originates somewhere inside the property. Flood damage is the opposite – as this is normally caused by external water (from rivers, rain, water mains, etc) entering the property.
Are your contents covered?
When it comes to insurance definitions, you tend to find anything that’s not physically fixed into the property is covered by contents insurance – so whether you’ve provided a handful of white goods, or a house full of furniture, it’s good to know they’re covered if a leak occurs.
Again, not all contents cover follows exactly the same definitions – so talking to your insurer about exactly what you have in the property is a good move before you sign on the dotted line.
It’s worth remembering that tenants’ contents won’t be covered by your policy, so you’ll want to make that clear when any tenancy is signed. Tenants’ contents insurance is usually very affordable, so it’s sound advice encouraging its use when new people move in.
Loss of rent
A good number of landlord’s insurance policies cover loss of rent occurring because of water damage following a water leak – but be careful, as it is sometimes a feature you’ll have to add when you buy your policy.
Whether or not you’re covered for loss of rent will also depend on how the situation unfolds with your tenants. If your loss of rent runs alongside a claim you’re making because of water damage, then you’re likely to be covered – but if tenants are withholding rent because of water damage that you’re not claiming for, that would be something you’d need to explore claiming as part of a tenant default insurance policy.