Landlords - protect your rental income following building damage

February 2010

Most Landlord Buildings Policies will offer rental income protection either as an optional add-on or automatically as an integral part of the policy.

It is essential that whether this cover is provided automatically or as an optional cover that the sum insured is adequate to avoid under insurance and the potentially severe financial implications that this can bring.

Therefore consider what your rental income is on an annual basis and make sure that the policy is arranged accordingly. If the cover is automatic, for example providing cover up to 20% of the sum insured for your buildings again check this is adequate to meet your actual rental income.

You should also allow for growth in the rental income during the policy period and the indemnity period required. The indemnity period is the maximum period in which Insurers will pay for such claims. This is commonly 12 months but this may not be adequate in certain circumstances for example if your property is a listed building and the timescale involved in reinstatement may be considerably longer than for a conventional modern house.

Remember, rental income protection as part of Landlord Buildings Policies is designed to provide cover following loss of rental income or the cost of alternative accommodation for your tenants following a claim for loss or damage under the material damage section of your policy and where the property becomes uninhabitable. It does not provide rent guarantee or rent protection should a tenant default on their rental payments. This would be a different policy.

For more information or an insurance quote please contact Joe Manning at Towergate Risk Solutions Sevenoaks on 01732 747 750 or email joe.manning@towergate.co.uk