Property insurance is available for both residential and commercial buildings and their contents. Here we take a quick look at some of the different types of property insurance in the market.
Any householder is likely to recognise the importance of property insurance.
For the homeowner, of course, building and contents insurance is essential for protecting the property against a wide range of threats – from fire to flooding, explosions to earthquakes, storm damage, impacts, vandalism and theft.
Indeed, any homeowner with a mortgage is aware that the lender typically made it a condition of the advance that suitable buildings insurance must be maintained at all times.
For those who are renting, contents insurance is also a safeguard against the theft, loss or damage of possessions and belongings kept in the rented property – and carried with you when you are out and about.
Commercial property insurance
Commercial property also benefits from the protection of property insurance which is specially written and tailored to suit its use by every conceivable type of business.
It is distinguished from other types of property insurance by that use and commercial property insurance, rather than standard home insurance, is essential if the building and its contents are used for business purposes.
Mixed-use property insurance
Sometimes, the distinction between residential and commercial use may be blurred by the fact that a building is split between both uses – there might be a flat above a shop, for example, an office above a residential ground-floor apartment, or living or rooms for boarders above a pub or suite of offices.
In that case, there is yet another type of property insurance that combines both purposes in the shape of mixed use property insurance.
Although many types of property insurance are designed to provide cover for residential or commercial premises that are occupied and used by their owners, there is entirely separate category of property let to leaseholders and tenants.
If the property is let, it is essential that suitable landlord insurance replaces any standard homeowners or commercial property insurance. As the Landlords’ Guild warns, unless the insurer is made aware that the premises are let, occupation by tenants is likely to invalidate your occupiers’ property insurance and any claim you make may be dismissed or settled in a lower sum.
Landlord insurance itself may be one of several different types – each tailored to the particular use of the let premises:
- residential landlords insurance, of course, provides the property insurance needed by landlords who own houses, flats, and other accommodation let to tenants;
- HMO landlords’ insurance is for owners of Houses in Multiple Occupation;
- student landlord insurance recognises the particular risks which might be associated with student tenants and offers a source of landlord insurance for those who might be finding it difficult to secure suitable insurance from regular insurers for this population of tenants;
- lodgers insurance – there is potential for confusion between definitions of tenants, who tend to live in self-contained rented accommodation, and lodgers who may are probably in a spare room of your home but sharing all other facilities – so, purpose designed lodgers insurance clarifies the relationship between landlord and lodger.
Property in trust insurance
If a property has been put in trust – to help manage future Inheritance Tax liabilities, for example – trustees need to protect their legal obligations and liabilities for the security and safekeeping of the asset by arranging specialist property insurance on behalf of the trust, its settlor and beneficiaries.
Unoccupied property insurance
When any property – residential or commercial, owner occupied or let – is left empty and unoccupied for longer than a month or two, unoccupied property insurance is necessary to ensure continued cover for the vacant property.
As you can see, property insurance comes in many forms.