Buildings Insurance

Home insurance is not legally required but you will have to take out buildings insurance if you have a mortgage on your buy-to-let property and, in any case, it would be foolish not to. This covers the structure of the building and everything that would normally be left behind when residents move out, such as garden walls, patios and fixtures and fittings, against damage caused by perils such as burglary, fire, extreme weather and burst pipes.

For the sum insured the rebuild cost – not the market value of the property – is used. This is the cost of rebuilding the property should it be totally destroyed. This sum can be found on your original valuation report and could be above or below the market value, depending on the property’s age. Some insurers, however, will offer unlimited cover, which means there is no need to submit the rebuild cost.

Problems with regular buildings insurance policies where buy-to-let properties are concerned are that the property may not be covered if it is unoccupied for more than 30 days – problematic during any extended void periods – and that cover for your liability as owner for any injuries that take place at the property may not be enough. You are also unlikely to be covered should people employed by you be injured at the property.