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Have you read the small print on your BTL insurance policy?

3rd December 2016

Whether it is to cover a car, pet, home or holiday, choosing insurance can be a tricky minefield, involving endless small print and variations between different policies and what they do and do not cover.

For landlords, the right home insurance cover is vital, but it is all too easy to get it wrong and doing so can result in financial devastation, as one ill-fated couple discovered.

Mr & Mrs X, rented out their home to tenants while they were overseas.  When they returned, they found their house and all its contents had been completely trashed.  The tenants had stripped the property of all the furniture and other fittings, and there was extensive water damage to the walls, ceilings and floors caused by extremely high heat and humidity levels, indicating the tenants had likely been growing cannabis in the house.

The couple mistakenly thought their home insurance policy – which was sold to them as suitable for a tenanted property – would cover them for the £100,000 worth of damage incurred.  But when they tried to claim on their policy their insurer refused to pay out, pointing to the small print in the policy.  The small print stated that it did not include cover for malicious damage or theft caused by people lawfully in the home.  The only cover provided was for one-off incidences such as fire, escape of water, subsidence, storm damage, flood, theft and damage following a break in.

Although it may seem reasonable to assume that an insurance policy for a rented property will provide cover for damage caused by tenants, when it comes to insurance one should never assume anything.  Every detail should be checked so you have a thorough understanding of exactly what you are and are not covered for.

Sadly, this couple’s experience is not unique.  Too many landlords inadequately insure their property, some mistakenly believing that a standard home insurance policy will cover them.  This story is a salutary reminder of the importance not only of choosing the right insurance product, but also of regular professional property inspections in protecting your investment and mitigating your risks.

Here at Sow & Reap we can tailor a service to your needs, including insurance pointers, recommendations on works to improve letability and to increase profit.  Contact us today for a chat.

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