By S Gulfraz
I am a great believer in looking through insurance documentation to know what I am covered, or rather what am I actually paying for.
I have a good friend who came to me this weekend, as he has purchased his first rental property after saving hard for many years. He was ecstatic knowing he has purchased the property with a view to getting a pension at 60 from the property through rental income.
My friend had gone to an insurance brokerage, and they had sold him the cheapest policy they had, which was with a well know large insurance brand. After having a quick look at the paperwork, and then taking longer to read it, as I felt there was certain important covers missing I told him he is not covered, if his tenants decided to deliberately damage his property.
Now you would think taking out a buy to let property insurance should automatically cover you for damage to the property by your tenants, as let’s face it the chance of someone else damaging the house is remote in comparison to the tenants damaging the house. It also transpires he is not also covered for theft from the property by tenants. The difference between this insurance cover, and one that did cover him for malicious damage and theft by tenants was £29.00!!
The insurer in question has significant branding showing how its policy is the best in the market place, yet it leaves out fundamental aspects of cover, and worse the advisers who sold the insurance should know the basics, and tell customers what they are covered for or not.
So for those of you who have taken out some form of cover during your lifetime, (it does not matter what it is or was for) however think back how many of you read beyond the policy schedule. Do you read the terms and conditions, and most importantly do you read the exclusions? I have to hold my hand up and say most of the time I brush through the terms and conditions; however recently I have started to be more careful.
I would recommend all our readers to go back into the drawers, pull out the insurance paperwork, and read through it. You never know you might pick up a valuable piece of cover that is required, but you’re not covered for. Trust me, when I say it is far better to change insurers than argue and be left vulnerable in case an event arises, when you really need cover.
Also is it prudent to rely on your advisers? Well the answer is no. At the end of the day they are there to advice you, but let’s face it, at the end of the day, their objective is to sell you cover, and unless they know the product inside out (which you would expect) they have no better knowledge than you do as the product purchaser.