Buy To Let Landlord's Guide To Flood Recovery

Date Published:

06/06/2008

Summer 2007 was a wet and miserable affair with severe weather conditions affecting many areas across the UK. Flooding has become a real and dangerous issue to homeowners, devastating many homes and causing thousands of pounds worth of damage to people's possessions.

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As a property investor and landlord you need to be prepared for any eventuality and understand where you stand legally. However there are a number of precautionary measures that you can take.

Insuring a building makes obvious sense because the cost of a fire or flood etc and dealing with the associated consequences such as loss of rent, repair and refurbishment would put most people in serious trouble.

There are lots of different insurance covers available - some provided as standard in landlord's specialist insurance policies - and some not. Possessions will generally be covered by contents insurance if you have it. Landlords' policies will often include a flexible amount of contents insurance cover to cater for the wide variation in level of furnishings provided by landlords. The fewer furnishings you have, the less insurance cover you will need to purchase and the lower your premium will be. It is the responsibility of the tenant to insure the contents they own.

Most tenancy agreements will state that a landlord will 'agree to give a tenant back any part of the rent that paid for covering any period that the property could not be lived in because of fire or any other risk for which he is insured for'.

Most policies will also pay cover for the cost of alternative accommodation, up to a specified limit. Typically this is up to 20-25 per cent of the insured value of the property or to a specific amount - say £20,000 to £25,000.

Some insurers will also find temporary property for you or your tenants, but most will just cover the rent (i.e. leaving you to find the temporary accommodation yourself.)

Landlords' policies will also pay for loss of rent you suffer because your tenants had to move out.

Contents insurance often covers damage to items in your garden up to a limit though flood damage is often excluded from this. Similarly, damage to a garden wall or shed might be covered by your buildings insurance, but again, the exclusion for floods may apply.

It is very important to shop around and make sure you are getting the best deal from insurers and that these eventualities are covered as best as possible. Brokers all have good landlords' insurance policies that are usually cheaper than the policies from the mortgage lenders.