Portfolio landlord insurance

Recent years have seen a trend away from the buy to let investor with just a single property to the majority of landlords now holding a portfolio of several properties to let.

Indeed, a research paper published by the Council of Mortgage Lenders (CML) a few years ago revealed that 40% of all let properties in the private rented sector are owned by the 7% of landlords who own more than five buy to let properties.

Just as the title suggests, portfolio landlord insurance is designed to provide the umbrella insurance policy covering all of the properties owned by a single landlord.

If you insure each of the properties in your portfolio separately, every one of them is likely to have a different renewal date. You then need to spend the administrative time and effort of carefully monitoring these dates throughout the year or run the risk of overlooking a critical renewal – and facing the consequences of an uninsured property if disaster strikes.

But portfolio landlord insurance not only saves you valuable time and effort in administrative costs, but it is also likely to offer significant discounts on the price of your premiums, compared to insuring each property separately.

What does portfolio landlord insurance typically cover?

Building insurance

• just as with any other form of property insurance, portfolio landlord insurance is designed to safeguard against the many risks of loss or damage the structure and fabric of all of the buildings in your portfolio;

• the risks are as diverse – and as serious – as, fire, explosions, flooding, impacts, storm damage, vandalism and theft;

• typically, the very worst-case scenario is anticipated in which everyone of your properties is struck by a major disaster, requiring each site to be cleared and new buildings to be constructed;

• for those purposes, it is necessary to calculate the cost of reconstruction and the relevant index compiled by the Royal Institute of Chartered Surveyors (RICS) on behalf of the Association of British Insurers (ABI) is generally used;

Contents insurance

• any contents owned by you of the properties in your portfolio may also be covered by portfolio landlord insurance;

• the contents may be extensive and highly-valued – as in the case of any fully-furnished properties you let – or may be restricted to furniture and furnishings in common areas, lobbies and stairways only;

• the total contents sum insured may be adjusted accordingly;

Compensation for loss of rental income

• if the worst does come to the worst and one of your properties suffers a serious insured incident, it is likely to become temporarily uninhabitable, pending repairs and reinstatement, and you stand to lose the rent that was otherwise due;

• portfolio landlord insurance therefore typically provides for compensation – up to prescribed limits – for your loss of rental income in these circumstances;

Public liability insurance

• if you own a portfolio of let properties, you may face considerable public or landlord liability risks;

• if a tenant of any of your properties, one of their visitors, a member of the public or the owner of a neighbouring property suffers an injury or has their property damaged through an incident involving your property, they may sue for compensation;

• claims such as this may reach very significant sums, and it is common for portfolio landlord insurance, therefore, to incorporate at least £1 million – £5 million or even more – of public or landlord liability insurance.

If you own a portfolio of buy to let properties, therefore, you might want to save money, time and effort in safeguarding your investment with the help of portfolio landlord insurance.