If you have a mortgage on the property or have calculated your rental income verses your outgoings this will ensure you do receive your rent. Most such policies will include the legal expenses, as detailed above. You will receive your rent and the legal fees to obtain vacant possession will be covered.

Policies will usually guarantee your rental for a fixed period, typically 6 or 12 months. Some policies will provide additional cover once you have obtained vacant possession until you are able to re-let your policy.

There were over 150,000 possession hearings in 2001 in relation to the 2.7m lets that took place the risk is relatively small but if you need to have your rent on a regular and guaranteed basis this insurance should be a high priority.

The costs vary from a fixed cost policy or are commonly rated as a percentage of the annual rental figure, typically 3-4%

Almost 40% of UK properties are under insured, which means in the event of a claim, insurers will not pay the full amount of the claim. Ideally, to ensure you are not under-insured you need to have a professional re-build cost calculated by a qualified surveyor although some insurance companies will provide quotes direct based on information provided; E.g. style, type, size, condition, age, improvements, area etc. All buildings policies will be index linked to reflect building costs increases annually. This is only effective if the original valuation was correct to start with.

Consent. It is essential that you advise and obtain consent to let your property from your mortgage lender, existing insurer and head lessee (for leasehold properties). Failure to obtain written consent from these parties may render your insurance void in the event of a claim. Sadly there have been many instances where buildings claims have been totally rejected because the insurer and or mortgage lender was not advised the property was let.

High Risk Tenants. Many mortgage lenders and general insures will not grant cover if you intend to place certain categories of tenants in your property i.e. Student, Multiple single sharers and tenants in receipt of State Benefits.

Employers Liability. Usually buildings policies will provide an element of Employers Liability cover. This covers claims for death or injury to anyone you employ at your property i.e. a gardener, painter etc. If you are letting to students or to tenants in receipt of state benefit the university / local authority will normally require a minimum of £5m cover.

Property Owners Liability. It is also essential that your policy includes Property Owners liability cover to a similar limit to cover injury, death or damage to individuals on or adjacent to your property i.e. Postman, meter reader, council employee etc. Some basic low cost polices do not include any cover.

Insured Events. The main insured perils which should be included in the building policy should be:

Fire

Lightening

Aircraft

Explosion

Smoke

Impact

Burst pipes or leakage of oil

Storm or flood

Malicious damage

Subsidence

Theft

Some policies will give the option of malicious damage caused by the tenants - a valuable option for let properties.

Loss of Rent. Most policies will compensate you for loss of rent following damage from one of the above perils if the property is uninhabitable usually 20% of the sum insured but some policies are up to 30%. (Not to be confused with Rent Guarantee policies .)