Four Factors To Consider When Purchasing Landlord Insurance

We understand that as a commercial landlord your insurance needs can be quite complex and you need to ensure that you have the right policy which fully covers your property assets. As a specialist property insurance broker, Mulberry can give you expert guidance to ensure you secure the right cover for your portfolio.

 

If you are looking to purchase Landlord Insurance, these four key factors should be top of your list when considering which policy you choose:

 

1.Tailored Policy Wording
Commercial landlords can benefit greatly from the cover provided by a bespoke policy wording specifically designed to meet their individual needs.

With the help of a specialist real estate insurance broker, you can secure a policy which not only provides cover for your buildings, loss of rent, and property owner’s liability, but also provides you with a number of extensions which would not normally feature in a standard policy, delivering added value without additional cost. A prime example of such an extension would be full cover for a property which becomes vacant (subject to the insurer’s code of conduct being adhered to). A specialist real estate policy can also deliver added benefit by providing your properties with cover free of the average clause and policy warranties.

 

2. Reinstatement Values
When it comes to safeguarding your assets, it is essential that you insure your property portfolio for the correct value to avoid any potential financial losses, such as those incurred by underinsurance.

Many commercial landlords fall into the trap of underinsurance by mistakenly insuring their valuable real estate assets for a sum which represents the market value, rather than the reinstatement cost. On average, 77% of all commercial properties within the UK are underinsured by up to 45%, which can cause significant monetary losses in the event of a claim.

Even in the case of a partial claim, the property’s insured value needs to represent the current cost it would take to reinstate the entire property (without deduction for wear, tear and depreciation). In return for insuring the property on this basis, your insurer will provide you with an automatic uplift of 30% (by way of an inflation provision) to cover any increased costs that occur as a result of the reinstatement assessment during the period of insurance, and any subsequent rebuild period, which could be 2 - 3 years.

As a specialist in commercial real estate, Mulberry is able to remotely calculate an estimated reinstatement value, helping you to avoid any issues with underinsurance. These assessments provide you with the guidance necessary to calculate the correct insurance value for your property portfolio, ensuring your assets are properly protected.

 

3. Lender Requirements
When a commercial landlord secures a mortgage on a property, the lenders place certain requirements on the insurance cover. These requirements vary between lenders and can, in certain circumstances, lead to insurers’ refusal to comply with lenders’ requirements. It is therefore important that your insurance is arranged by a specialist real estate broker who fully understands the lender’s requirements, and is able to negotiate with your chosen insurer.

Mulberry has the expertise and market knowledge to arrange fully compliant policies which have all been fully stress-tested by the UK’s prime lenders. This stress-testing is an ongoing process as lender’s requirements change from time to time, ensuring that your insurance is always up-to-date and as accurate as possible.

 

4. Quality of Claims Service
It is fundamental that you select a broker and insurer who can provide a high level of claims service. There are many advantages to receiving a full claims management service, including reducing your own administration costs, minimising disruption, and most importantly accelerating the process of receiving your settlement. Mulberry has a wealth of experience in this area, and our extensive insurance knowledge enables us to negotiate directly with insurers in order to achieve the best possible outcome for you.

As you can see, by working with a specialist broker you will gain access to a valuable resource and enjoy many benefits, including a personalised service, tailored policy, and the rewards of expert knowledge.