60% of leaseholders 'ripped off' on their building insurance

Landlords that are also leaseholders are being ripped off according to a recent report in Property Week. It highlights a claim by Chainbow which manages more than 77 sites that are home to 3600 leaseholders across the south east said that landlord insurance scams are widespread.

This is because the landlord who is responsible for insuring a residential block often receives a commission from the landlord insurance broker or landlord insurance company for using their landlord insurance. As the landlord will ultimately pass on the costs of this landlord insurance to the leaseholders their is little incentive for the landlord to find the cheapest landlord insurance. There is an incentive instead for the landlord to seek out the landlord insurance policy or landlord insurance broker that pays the highest commission.

The RICS has launched a consultation into the transparency in professional fees charged on property transactions and services and is currently gathering evidence. Central to the investigation is the declaration of insurance remuneration and commissions.

Landlords warned about taking in pets

Landlords have been warned by leading landlord website Property Hawk about taking in tenant with pets. Chris Horne Editor warns landlords that most landlord insurance policies do not cover landlords against damage to their property by guests and pets.

Landlords intending to take tenants with pets are always advised to check with their landlord insurance broker before buying.

The best advice for landlords considering taking tenants with a pet is to ensure that they take a large deposit.

Landlords that live in an apartment should also check their lease as this may specifically prohibit pets.

Landlord insurance - why rebuild costs are important?

Many landlords that are looking to insure their their buy-to-let property will look to insure their property for an amount similar to what they think it is worth. This on the face of it seems a logical way of proceeding.

The reality is if a landlord insures their buy-to-let property for it's current value then they will be over insuring their property.

The reason is because they only need to insure the property for the rebuild cost. Most properties value is contributed significantly by the value of the land on which the building sits. Typically 25-35% of the value of a property relates to the value of the land.

Therefore, a landlord needs to use a specialist website such as the one by the Association of British Insurers (ABI) This site has a rebuild calculator build into it allowing a landlord to calculate the rebuild cost for their buy-to-let property.

The other thing a landlord should note is that rebuild costs vary across the country, being highest in London. The calculator with use the postcode relating to a landlords buy-to-let property to make this regional adjustment.

Landlord insurance - the rights of leaseholders

Landlord insurance has critical importance to both, the tenant and the landlord. In the case of a leaseholder this is particularly important.


If you live in a leasehold property, the insurance is usually dealt with in 2 ways. Generally, flats leases require that the landlord insures the property. Later, the landlord is free to either recover the cost from leaseholders as a separate payment, called “insurance rent” or include it in the service charges. Leases of houses are quite different and require that the leaseholder insures the property in accordance with the instructions, provided by the landlord, who usually picks the insurance company.

If your case falls under the category, where property insurance is obligation of the landlord, the Schedule to the Landlord and Tenant Act of 1987 gives you, as a tenant, a right to require basic information associated with the insurance policy, which has to be provided by the landlord within 21 days. If the landlord fails to submit the required documents, he can be accused of criminal offence and fined up to £2,500.
If your case falls under the second category, the rights are even more extensive. The leaseholder is obliged to look for the most appropriate insurance policy. Should any misunderstanding occur between the landlord and the leaseholder, the latter has a right to apply to the court or to the Leasehold Valuation Tribunal.

For more FREE advice relating to insuring leasehold properties landlord can use the Leasehold Advisory Service.

Landlord insurance - cash back offer

Endsleigh famed for providing student room insurance are underwritten by Norwich Union. They now offer rent guarantee, landlord buildings insurance and landlord contents insurance and of course tenant insurance if you want to ensure your tenants are also covered. We particularly like their no nonsense rent guarantee insurance which guarantees a landlords rent for 12 months for less than a £100. Endsleigh are also the only landlord insurance company we know off to offer a cashbackservice on their policies. It all helps!

What sort of landlord insurance cover should a landlord get?

Landlord insurance is mainly sold by insurance brokers who sell insurance underwritten by some of the large insurance companies such as Norwich Union, Zurich, AXA.

Many landlord insurance policies are standard landlord insurance policies produced by these companies. In some cases individual insurance brokers such as the landlord insurance brokers in our brokers section have delegated authority to tweak their landlord insurance policies in order to offer additional cover or less cover in certain areas in order for them to offer useful cover extension or to reduce the premium they charge. One aspect that a landlord should use in assessing a policy is the cost per £1000 of cover. Cover costs range from £1 per £1000 upwards. Some insurers will offer very basic levels of landlord insurance cover with the option to add in specific additional levels of cover whilst others such as Alan Boswell have landlord insurance policies that offer a very generous and broad level of cover.

Do I need specialist landlord insurance?

Landlords need specialist landlord insurance. Why? Because household policies do not cover buildings, contents or the landlord for third party liabilities while their property is let out.

It’s not illegal not to have landlord insurance, although some buy-to-let mortgage lenders will insist that it is in place as a condition of the mortgage. If a landlord is prepared to accept the risk that their investment property: burns down, the tenant sues as a result of an accident at the property, or replace the roof because of storm damage, etc If a landlord is happy to take on these potential risks then landlord insurance isn’t required ( oh yes , don’t forget flooding!)

Personally, I’m not sure I could sleep at night without being fully covered with a landlord insurance policy. To my mind for landlords to take that kind of risk for the sake of a couple of hundred pounds a year is just not worth it.

Calculate rebuild costs by registering at the Association of British Insurers (ABI) website