Property Owners Insurance

Property Owner’s Insurance (or Let Property Insurance) is arranged by the owners of buildings – usually those which are let for domestic or commercial occupation but sometimes where the buildings are occupied by the policyholder.

The purpose of a Property Owner’s policy is to give protection on the buildings in case they are damaged by an insured peril. Types of peril can include accidental damage, fire, lightning, explosion, theft, earthquake, aircraft, impact, riot, civil commotion, vandalism or malicious damage, storm, flood, burst pipes, escape of oil, falling trees or aerials and subsidence. Cover given by an Insurer depends on the type of property, the type of tenant, construction of the building, age of the building, mortgage or loan requirements and the amount of premium to be paid, amongst other factors.

The sum insured on Buildings must be based upon the rebuilding value of the property (a surveyor or builder may be able to advise you of this) – not its market value or the amount you paid for it. Some owners also require cover for the contents with which they furnish the property prior to rental.

Let Property Insurance will usually include cover for rent that you may lose in the event that the property cannot be occupied due to a claim. Depending upon the terms of the lease, the tenant may not be liable to pay rent if the building cannot be used following a claim and the policy will make good this loss to the landlord. Cover can be arranged for 1, 2 or 3 years, depending upon the anticipated period of time to rebuild following a claim, and it is based on the annual rental income.

The owner of a let property may be responsible for any damage caused to another person or their property due to negligence: this is called Property Owner’s Liability, or Public Liability insurance. The minimum limit of indemnity for Property Owner’s Liability is normally £1m, but higher limits are available. The insurance would pay any compensation that is awarded and also legal fees. Indeed, where a claim is alleged against a policyholder, the Property Owner’s Liability insurers would defend the claim and pay the Court costs even if it was proven that the policyholder was not negligent. Thus, if someone were to take action against you, but the damage or injury wasn’t your fault, your insurers would still pay your Court costs.

Examples of incidents that would usually be covered under a Property Owner’s Insurance policy are as follows:

• A tile is blown from a roof during a storm and causes damage to a parked car.
• A building catches fire and has to be rebuilt.
• Following the fire, the landlord cannot charge rent but still has to pay the mortgage on the property. The policy will pay for the loss of rent.
• A thief tries to gain access to the property overnight and causes damage to the doors and windows.

Norris & Fisher are happy to answer individual queries on Property Owner’s Insurance (or Let Property Insurance). Please telephone us on 01794 518855. If you would like a quotation, please complete our Enquiry Form and return it by post, fax or email. We will respond immediately we receive a quotation from insurers – usually on the following working day.