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February 5, 2008

Landlords’ insurance round-up

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by Gill Montia

Landlords' insurance round-up

Financial website, Moneyextra.com, is urging landlords to check that their insurance is providing the right cover at the best price.

First on its list of recommendations is to avoid cutting corners in terms of cover and to bear in mind that buildings insurance does not have to be purchased from the mortgage provider.

(According to research by Sainsbury’s Home Insurance, one in five house purchasers believe they have to buy buildings insurance from their lender in order to secure a mortgage offer.)

Rebuilding costs can rise faster than the rate of inflation, so it is useful to base the valuation of a property on an annual survey, rather than an inflationary index.

Take appropriate action to minimise the dangers of adverse weather or flooding by keeping the property in good repair and supplying sandbags if flood is a possibility.

Busy landlords can benefit from a home emergency policy that will cover heating, plumbing, drainage and electrical problems, broken doors and windows, changing locks, vermin infestation and unexpected storm damage.

They should also consider paying an extra premium for the option of temporary accommodation for the policyholder (if he or she is resident in the building) and tenants. This type of cover is useful if a property is seriously damaged by fire or flood.

Taking time to value any contents accurately is also a worthwhile, as is reviewing the excess applied to any policy.

Always read the policy small print and advise the insurer of any material facts that could affect insurability.

Finally, building a good relationship with tenants is important because it can ensure that the let property and its contents are treated with respect.


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