Insuring Buildings

Neither buildings nor contents insurance is legally required but you will have to take out buildings cover if you bought the property with a mortgage and, in any case, it would be unwise not to. This covers the structure of any buildings included in it and any items that would normally be left behind when residents move out, such as perimeter walls, patios and fixtures and fittings, against damage caused by perils such as fire, flood and pipes bursting.

Rather than the market value of the property, the rebuild cost is used as the sum insured - the cost of rebuilding the property if it is completely destroyed. This sum is included on your original valuation report and could be above or below the market value, depending on when the property was built. Some insurers, however, will give cover for an unlimited amount, which means there is no need to inform them of the rebuild cost.

Possible limitations of regular buildings insurance where buy-to-let properties are concerned are that the property may not be covered if it is empty for more than 30 days - a problem during the inevitable void periods you are likely to experience - and that cover for your liability as owner for any injuries that might occur at the property may not be sufficient. It is also likely that you will not be insured against people employed by you being injured there.

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