Is your buy-to-let flat properly insured? You may not know it, but there is bespoke landlord insurance out there that will cover your lovely investment against damp, dry rot, ceiling collapse, and the loss of rent due to the subsequent tenant flight.

If your flat is in a purpose-built rental block, the chances are your service charge will already cover landlord insurance; check with the managing agent if you are unsure. The only thing a general block insurance will usually not include is contents cover, so if your rental property is kitted out with Queen-Anne furniture (a very bad idea), you should think about getting extra cover for it.

Separate cover for a leaseholder landlord (ie, where the freehold is owned by a different party) will insure your own fixtures and fittings, employers’ liability and owners’ liability.

However, specialist landlord insurance is vital if you own a stand-alone rental property. Ordinary household insurance is not enough, and any claims made on such a policy might be rejected by a loss adjuster.

Background

• Tales of a landlady: Tax reforms

• Into the sunset

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• Tales of a landlady: Degrees of success

• Tales of a landlady: It pays to shop around

• Tales of a landlady: Residents only

• The ties that bind

• How low can you go?

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• Tales of a landlady: Avoiding the agents

• Tales of a landlady: In the dock

• Tales of a landlady: the age of reason

• Tales of a landlady: Heroes and villains

• Tales of a landlady: High maintenance

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• Tenants like gardens, but not tending them

• In the doghouse

• Parking mad

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• It’s eviction time

Background

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• A letting gamble

• Spread betting

• When buy-to-let turns from a hobby into a living

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• Landlords: halo or horns?

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Bryony Doran owns and manages 15 rental properties in Sheffield, which she rents out to both students and regular tenants. “Our houses cost about £175 a year to insure, under a policy called Landlord Solutions, which I got for a considerable discount because I arranged it through our local landlords association,” she explains. “It covers the fabric of the buildings, white goods and carpets, employers’ liability, public liability, and also the buildings when they are empty, which means our student houses are covered over the summer break.”

As Doran points out, you will need a pretty big disaster before they click in. “Something like a fire. Or a serious flood. I’ve only ever claimed once, for goods stolen in a burglary. The only problem was that one of the students’ laptops was also pinched, which wasn’t covered. So you need to remind tenants that they should get a policy for their own effects. Or make sure they remember to put the burglar alarm on!”

I get on to David Lawrenson, lettings consultant (www.lettingfocus.com), and self-styled landlord expert. “Specialist buy-to-let insurance is about 20% more expensive than ordinary cover,” he tells me. “But it’s worth it. If an incident arises that necessitates the tenant moving out, there are policies that will cover you for not only the loss of rent, but also the cost of rehousing the tenant.”

Has he made any successful claims? “Some idiot above one of my flats had a leaking shower, which led to the ceiling collapsing in my lounge. It was an open-plan, one-bedroom flat, so obviously the tenant had to move out for six days or so while it was being repaired. And my insurers paid the loss of rent.”

I think, crossly, of one of my properties in which I had very grumpy tenants, because the roof was leaking over their bedroom. Yes, we gave them a huge goodwill rental reduction. Yes, we had landlord insurance. No, we didn’t realise we could claim for the loss of rent. Blast.

However, not every landlord with grumpy tenants and a leaking roof will be able to get their money back. One of the key things a loss adjuster will look at is whether the property is properly maintained. “I had a bit of render blow off in an 86mph gust from the front of one of my buildings, and claimed for it. My claim was rejected because they said the building was not properly maintained,” says Lawrenson. What bad luck. “Actually, they were right, and I was trying it on,” he admits, with candour.

Most policies will usually have an occupancy clause that will insist the property cannot be left empty (but rented out) for more than two weeks, so your tenant should probably avoid going off to India for a month, leaving the bath running. Sometimes there is also a cap on the amount you can claim in lost rent, say, £2,000, which might tot up quite quickly should you have a fearfully sexy flat with Queen-Anne furniture.

“You must find out what your insurance covers, because there is a huge range,” says Meurig Lloyd, policy officer at the National Federation of Residential Landlords. “You can even get very specialised policies, such as emergency insurance cover for your boiler blowing up. Here we find the best packages are from people such as British Gas, because the cover is linked in with Dyno-Rod so it will supply people to fix the problem.

“If your insurer has a close relationship with the people who actually come and do the work, there will be no lag between the event and the repair.”

How to find the best insurer? “Speak to a specialist broker or talk to people at a landlords association,” says Lloyd.

To minimise the likelihood of a claim in the first place, do think about showing your tenants a bit about how their (ie, your) lovely new home works. Show them where the fuse box is, so they can cope with an electricity blackout, and the stop valve, so they can turn off the water in the event of a flood. Show them where the overflow pipe is, so they can ring alarm bells if they see water pouring down the back of the building. Treat your tenant like a responsible human being, in other words. Insurance companies like it like that. And so will your tenant.

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