“My tenants burned down my house” – Why a good insurance policy is a must for landlords!

By Nichola Turpin, Debt Recovery Solicitor at Woodstock Legal Services

When owning a property, one important action to take is to obtain insurance. This is even more important when renting a property and effectively trusting it to someone else. If the landlord has a mortgage on the property, then it is likely that this is a requirement in any event, however if they are mortgage-free, it’s important not to avoid obtaining insurance just because it is an added cost.

An honest mistake with devastating consequences

Woodstock Legal Services dealt with a case recently where the landlord owned a number of rental properties. One in particular contained a beautiful stonework fireplace with a cast iron wood burner. After months of living in the property with no problems, the tenants made a serious mistake. They lit the fire and then forgot that they had! They went out for the day, and you can guess what happened next. There was a serious fire in the property with devastating consequences. Thankfully no one was home at the time of the fire, and no one was harmed, but the landlord is now left in a position where not only has his property been destroyed, but he is also responsible for providing suitable alternative accommodation for the tenants until the repairs have been undertaken – something which could take a number of months.

Why a good insurance policy pays for itself

On a more positive note, this particular landlord was insured for such an eventuality and the thousands upon thousands of pounds worth of damage was covered by the insurers for a modest excess fee. The repairs and redecoration took place quite swiftly, and the tenants were able to move back into the property after only a few months.

But what would have happened if this landlord hadn’t been insured? Not only would the damage to his property have cost him an excessive amount of money, but he would also be responsible for providing accommodation to the tenants until the property was restored.

Tenants who themselves have lost everything in a devastating fire and may not be in a position to continue to pay rent for a period of time.  

Potentially, this is a figure that would result in a landlord having to sell the property altogether.

Remember, this is just one example and, fire is not the only risk. There are other issues that can arise with a property, subsidence for example, or as we have just been reminded with the huge storms in the UK, weather damage. When renting a property, landlords have a duty to ensure that the property is fit for purpose, so these issues need addressing immediately and without insurance, landlords could end up having to find a large sum of money in little time.

Encourage your landlords to check they have adequate cover not only to cover repair costs for their property, but also loss of rent/alternative accommodation. Many landlords may not even be aware of their obligation to their tenants if their property becomes uninhabitable due to fire, flood or other major incident. Having cover in place to take the stress out of having to make emergency arrangements at their own expense could prove to be invaluable, so be sure to fully explain their risks to your landlords before an incident arises.