Analysis: Portfolios can go to pot if cover is poor

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Landlords have not had an easy time of late. Earlier this year, a number of councils introduced mandatory landlord licensing despite much opposition. Then, 

in his Summer Budget, the Chancellor announced plans to cut landlord tax relief, thus making things more difficult financially for buy-to-let investors. 

So the last thing they need is to find themselves out of pocket thanks to their insurance policy not living up to its promises. And even some of the more expensive policies from reputable providers can fall down when it comes to covering certain eventualities. One growing problem springs to mind – with ‘growing’ being the operative word.

According to police estimates, a massive 500,000 people are running cannabis farms from their home. A number of these are taking place within rental properties, without landlords having any knowledge of it. I remember reading the story of Luigi Gianino, who rented out an attractive family home in Suffolk only to find that his tenant, a businessman with a family, had turned it into a cannabis farm, causing a huge amount of damage. Gianino’s insurance claim was rejected thanks to a clause in his policy excluding illegal activities.

It is easy to think such things will never happen to you but, if your policy does not cover all eventualities, it leaves you in danger of being seriously out of pocket.

Ensure your landlords are well aware of the problems faced by the sector and recommend a policy that covers them adequately. Otherwise, their hard-earned portfolio may go up in smoke.