A Property Owners policy is designed to meet the insurance needs of a range of Property Owners involved in Residential, Commercial or Industrial investment property risks. The key areas of cover required for investment property include the following:
Material Property Damage
The buildings sum insured should be equal to the cost of rebuilding the property from scratch if it is completely destroyed. (You should allow for the cost of debris removal as well as architect and surveyors fees and other planning & development fees) This is known as the reinstatement value.
Note: This is not the same as the market value of the property.
Loss of Rent Receivable
Most polices for investment properties now include cover for loss of rent if the property is badly damaged or destroyed by an insured peril and this results in the property being unsuitable for occupation by tenants. As most landlords rely on the rental income to cover their mortgage payments, it is vital to ensure this cover is included on your policy.
Check that the Loss of Rent provided by your policy is adequate – many insurers automatically give 20% of the building sum insured. Also ensure that you have an adequate ‘indemnity period’ as in some cases it may take more than 12 months to rebuild / reinstate your property.
Contents of Common Parts
This applies to furniture, furnishings, fittings, machinery, plant, equipment, alterations, decorations and all other contents, the property of the Insured or for which the Insured is legally responsible including fitted carpets, contents of fixed fuel oil tanks, contents of fixed liquefied petroleum gas tanks and contents of fixed diesel fuel tanks; refuse disposal bins and skips whilst contained in or about the storage or communal areas of the Buildings
Contents of Residential Areas
This applies to furniture, furnishings, fittings, carpets, audio visual equipment and other household goods in any self-contained flat or other private dwelling which is part of the premises.
Unlike owner occupied properties, landlords do not normally need full contents cover. Landlord’s need contents cover for items that they own such as electrical appliances, carpets, curtains, blinds etc. A rental property would typically involve a much lower contents figure than an owner occupied property, as the tenant is responsible for their own personal contents items.
Fire Brigade Charges
Cover is provided for charges levied against you by any local authority in respect of attendance by the fire brigade for the purpose of minimizing a loss following damage caused to your property by Fire
Property Owners Liability
Any amounts which you, as owner of the building(s) become legally liable to pay as compensation for an accident, occurring during the Period of Insurance, which causes accidental death or accidental bodily injury to a person or accidental damage to third party material property. The Limits of Indemnity available are usually €2.6million or €6.5million (any one claim).
Your legal liability for bodily injury sustained by any employee which arises out of and in the course of his/her employment by you in connection with your property owners business. The Limit of Indemnity available is usually €13million (any one claim).
Policies can be extended to provide protection for legal costs and expenses arising out of employment disputes, legal defence, contract disputes, property protection and bodily injury, tax protection.
Policies can be extended to include accidental loss or destruction of or damage to the Property occasioned by or happening through or in consequence of Terrorism.
Terrorism means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public in fear.
Engineering / Equipment Breakdown
Cover is provided for a range of risks such as accidental damage, loss, breakdown from internal faults, electrical breakdown, material damage, sudden and unforeseen damage and explosion. Items of plant & machinery include Boilers, space heating, ventilation and air conditioning systems, Lifts and escalators, Building maintenance units, Electrical distribution systems, Equipment used for building security and environmental control, Electrical and mechanical parts of water pumping, pressurisation and distribution systems.
If you own an investment property or a portfolio of investment properties, then it’s vital that you have the right property insurance cover in place to protect your investment and a Property Owners Insurance policy will provide the key covers you need . Do not match an investment property risk with a private household type policy, often labelled ‘Landlord’ policy. Insist on ‘Property Damage All Risks’ insurance for your investment property.