Landlords – Ignore at your Peril! The Correct Insurance
Landlords – Ignore at your Peril! The Correct Insurance
The other main issue that many landlords either don`t realize or worse, again choose to ignore, is informing the insurance company that the property is being rented out. The insurers may have restrictions or impose a higher charge to cover the theoretical higher risk of having a tenant in residence. Landlord insurance is an important type of cover that serves to protect landlords against potential losses associated with a rental property. This is a very different policy from the standard residential property insurance, as it offers a tailored solution that forms a protective barrier to keep landlords from bearing the financial brunt of unexpected incidents related to their rental properties.
As with the lender scenario, in many instances the insurance will not be called upon and no one will ever know that the property was let out. However, if there is a cause to claim, then the problems can start immediately, as the insurers will ask some very pertinent questions; which the answers will reveal that the property has been let out. If the landlord chooses to lie at this stage, then this can also be deemed as fraudulent, and the claim be nullified, leaving the landlord to pay for the cost of the repairs.
The issue is that the landlord has a duty of care towards the tenant. In the event of a fire or flood (which are the cause of the majority of claims), the tenant is expecting the property to be correctly insured and for the insurer to pay for the prompt start to repairs and in some cases the payment for their living costs during the time that they have to move out of the property whilst the remedial work is done. If the insurer nullifies the claim the landlord is going to be effectively uninsured and could end up paying the bill for the tenants` interim alternative accommodation as well as the full cost of the repair.
Landlord insurance comprises a wide range of features (some at an additional cost to the basic insurance), each uniquely designed to address different risks and eventualities. These various features include:-
Buildings insurance which covers the building itself, ensuring the landlord is not left out of pocket if structural damage occurs.
Contents insurance covers any items that are provided within the rental property. This can be a valuable safeguard if these possessions get damaged or stolen.
Accidental damage cover is another critical aspect of landlord insurance, which covers costs if accidental damage occurs at the hands of a tenant.
Liability insurance forms another component of comprehensive landlords insurance. This ensures the landlord is financially protected if a tenant or visitor experiences an accident on the property and decides to take legal action. It can also cover any potential claim for damage to a member of the public or neighbour`s property.
Rent and/or rent guarantee is a very beneficial inclusion in a landlord policy, providing a financial safety net if a covered event leaves the rental property uninhabitable, causing a disruption to the rental income.
Legal costs insurance normally ties in with the rent insurance, but it is a very important part of any policy, either included or as a stand alone, because it covers the legal costs in the event of an eviction.
Investing in a comprehensive buy to let insurance / let property insurance allows landlords to navigate the rental market confidently, knowing they are adequately covered against a multitude of potential risks. Insurance exists for peace of mind and the cost of it for a landlord, needs to be built into the costs of the rental – with currently high rentals, the rent and legal costs need to be seriously considered as an important protection for the landlord. The risk of not being properly insured is a far greater cost, risk and emotional burden than having it in place before the tenancy starts. It is vital to make sure all aspects of it are kept up to date on a regular basis and any changes are promptly informed to the insurer.
As this article is in two parts, it must clearly stated that there is no excuse for not having these two vital permissions in place. Given the current government`s views on bad landlords; this is an area that can very easily be covered by acting in a professional and business like manner – exactly what the government and tenant expect!!