What is landlords insurance?
This form of insurance is tailored specifically to the needs of a landlord. This type of insurance covers additional items such as rent default and tenant damage, loss of rent, and damage to furnishings, buildings, and fixtures.
There are often many financial gains that can come from renting out a home or flat. These advantages may outweigh all the regulations that will befall upon you as a landlord. There are many risks involved. Insurance is vital for protection.
It is good to have a thorough understanding of what it is that you are doing as a landlord, your ability to carryout good management, and investing in a good insurance package will take care of most damaging and unfortunate events that may fall upon a landlord.
There are no laws in the UK that mandate insurance for landlords or tenants. It would be very unwise to be in either situation without proper insurance cover. If you have a property that has a mortgage, your lender will require that property is insured.
What should I look for in a policy?
Most landlords find that their properties are their most expensive possession that they will ever buy and invest in. It is beneficial to take time when considering what property is worth. Really think about how much it would cost to replace.
It isn’t this stage of the process that most landlords begin having problems. It is when claims need to be filed. Make sure you are clear on exactly what your policy will cover and understand exactly what you are getting into with any policy. Make sure to ask what is covered, what isn’t covered, and what the insurer will replace. Many times you will get new item replacements, other policies will only pay a depreciated value. Make sure to fully understand a policy before making a commitment. Make sure to ask for clarification if you are unsure. Insurance contracts are legally binding.
What types of policies are available?
Defined Events/Listed Events is a very basic landlord policy will cover you against loss or damage, if it has been caused by something listed by the insurer. It has to have been agreed upon.
Accidental damage is more thorough than the above mentioned. This type of policy will cover you against accidental damage that occurs to a building’s structure or contents. Due to the unpredictability of these situations, this type of policy is typically higher in cost. You may need to cover events such as the loss of a roof in a storm, the impact of a vehicle, a falling tree, an earthquake, fire, etc.
Both policies will cover the building and your household property. It is important to make sure that your policy clearly defines the terms of what is building and what is content. You should be covered for repairing any structural damage.
Authorised and regulated by the Financial Services Authority