What is Building Insurance For Landlords?
Building insurance for landlords is encouraged, as it protects them from monetary loss when the building they rent out is wholly or partially destroyed. Instead of rebuilding or repairing the property from their income, the insurer compensates them, as long as the incident causing the damage was covered in the insurance policy. There is a range of factors affecting the premium price of the insurance and numerous accidents that are covered under the policy. If you would like to read more information or learn more about the pricing of business landlord insurance, you can do so here.
What Types of Accidents Does Building Insurance For Landlords Cover?
1. Floods and Water Damage
Floods are relatively common in the United Kingdom compared to other natural disasters and can cause severe damage to a building. The infrastructure of a building like the foundation and walls is vital, but muscular water bodies can still knock them down or erode them to a severe extent. Additionally, weaker parts like doors and windows are more prone to breakage as it takes less force to break them, which fortunately are covered by building insurance.
The insurer reimburses the expenses of repairing the property and removing any rubble. In the same way, water damage is also covered whereby pipes may burst or a boiler may leak, causing grave damage to the property, which is more gradual.
2. Fire & Explosives
Fires are unpredictable and can burn down entire buildings if swift action is not taken. They can start from numerous sources, from wiring to ones started from a third party, and are not easily preventable. As a result, having building insurance that covers fires is essential because the aftermath is frustrating and expensive, and a premium is a small price to pay compared to this. Moreover, explosions are also dangerous to buildings and can consequently cause fires: they can be caused by boilers, water heaters, and cookers. Both are included in building insurance policies.
Storms are a combination of dangerous weather, including heavy rain, strong winds and fierce lightning, which can subsequently go on to cause a fire. The winds frequently uproot heavy trees, which fall and block the driveway, but unfortunately can also cause damage to the building, like breaking through a window or scratching the roof. The lightning can also destroy the roof and start fires inside the property by heating the circuits more than they were designed to withstand.
Building insurance covers intentional damage to a building by people in addition to solely natural disasters. Examples include if a thief broke down your door or cracked the window to get inside the property, the insurer would pay compensation for the damage so that new doors and windows can be installed. Likewise, any graffiti sprayed onto the property wall would be included in the policy, and the insurance company would cover the expenses of removing it or painting over the affected area.
What Factors Influence the Premium of Building Insurance for Landlords?
The most significant factor affecting the premium price is the rebuilding costs based on the property’s value: this includes the size, number of rooms, materials, location and year it was built. When a house has numerous rooms and floors, is made from sturdy and expensive materials, located near a lake and built in the 1970s, this would be more expensive to insure than a small, modern house. This is because the rebuild cost is the price to construct the entire building again from scratch, and the more expensive they are, the higher the risk for an insurance company to insure.
It is also worthwhile to consider the type of property you are renting. One individual flat may be smaller than a house, but it poses more risk because it is affected by the flats surrounding it. For example, there is a higher likelihood of a fire or flood because many apartments in the building may cause these accidents but affect your particular property. The average annual premium for a flat is around £170, compared to a small house that is £150. Additionally, the same sized detached house would be cheaper to insure than a semi-detached.
Other factors affecting the premium are the previous claims history of the landlord, tall buildings, the shape of the roof, level of coverage and additional policies added onto the insurance.
Building Insurance for Landlords – To Conclude
Overall, building insurance for landlords is efficient because it can save thousands to millions of pounds when there is damage to the property, which can be detrimental for development. For growing landlords, it is vital to have a steady revenue so that profits can be used to expand and buy more properties, which without insurance would be a risk.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Is Professional Indemnity Insurance a Legal Requirement?
How Much Product Liability Insurance Do I Need?
Is Employers’ Liability Insurance a Legal Requirement?
Remember to Compare Your Business Costs is here to help your business every step of the way from business advice, or saving you time and money on your business purchases such as:
Ally Cox is a dedicated Copywriter and Blogger for CompareYourBusinessCosts.co.uk. In under two years, the platform achieved the esteemed accolade of ‘Website of the Year’. Since its award-winning debut, Ally has been instrumental in fostering organic growth for the website, expanding its offerings to encompass comparisons across a diverse range of over 20 products to help serve all your business needs.