At a recent talk given by the NFU Mutual on estate insurance we were reminded of the risks involved in maintaining adequate insurance cover, particularly in relation to landlords. As a firm we manage a wide variety of property portfolios throughout the UK from rural, residential, commercial or a mixture of the above.
A key part of our management responsibility is to work with our clients to ensure that adequate and robust insurance policies are in place for when the worst happens. All too often we hear cases from insurers relating to under-insurance or where policies have been unfit for purpose.
Here are some of the top tips to help you manage what may be a highly distressing situation should you have to make an insurance claim:
- Read your policy: is the policy fit for purpose and does it cover the intended use of the property? Make sure you are clear on any scenarios where your insurer won’t pay out as well as the excess amounts payable and any upper limits of the cover.
- Under-insurance: Don’t fall into the trap of relying on indexation of the rebuilding costs as many do. Have a building reinstatement cost assessment carried out at least every 5 years to make sure you are within a sensible margin of current rebuilding costs.
- Fair wear and tear: many insurers will not pay out for damage caused as a result of fair wear and tear. Speak to your insurer for their interpretation of this!
- Tenant checks and inspections: during certain types of claim you may be required to demonstrate that you have carried out due diligence on all tenants and that you have undertaken regular inspections. Keep clear records of this activity for the duration of that agreement and speak with your insurer to understand the frequency of property inspections required.
- Damage to unoccupied properties: most policies will only cover a landlord for a limited period of time. Be sure to check what you are covered for.
Whilst this is neither an exhaustive list nor meant to becoming a landlord, it does highlight the need to regularly review your policies, inspections and rebuilding values
For assistance with a building reinstatement cost assessment please contact either Alex Broad, alex.broad@fishergerman.co.uk or Robert Browne, robert.browne@fishergerman.co.uk
