27/04/08

Landlords are being warned that their buildings insurance could be rather inadequate and that they could face serious losses if they have opted for a standard home insurance policy rather than one specifically tailored towards landlords.

This is the view of buy-to-let lender Paragon who says that regular building insurance policies are intended for owner-occupiers and carry important clauses that can leave let properties exposed.

A common example of these clauses is that many ordinary household policies will exclude any damage that is caused by burst pipes and do not normally cover and theft when a property is unoccupied for more than 30 days. Now, since many rental properties can stand empty for longer periods of time and are often subject to refurbishment, just these two instances could prove pivotal.

Damage that is caused maliciously by a tenant is almost certain not to be covered unless you get a specialist landlord’s building insurance policy and when a property becomes uninhabitable a standard policy will provide cover for alternate accommodation but any loss of rent will be incurred by the landlord.

These are just a few reasons why landlords should exercise caution and go for specialist building insurance cover if they want to properly protect their property. Other potential pitfalls of a normal policy are far ranging and include liability cover among other things.