The majority of UK homeowners are fully aware of the importance of good building and contents insurance; providing protection should things ever go wrong. If you own a property which is not used as your home but as a rental business then are you aware that standard buildings and contents cover is insufficient (and in some cases will be declared void if your property is occupied by tenants rather than yourself)?
Landlord insurance is a must for anyone owning a property which is used as a business to generate a rental income, whether it is a residential property or a property used for business. It is the only real way to ensure you have adequate cover should anything happen to the property whilst it is occupied by your tenants. Property of any type is a significant financial investment and it is prudent to insure your property against any damage that may occur.
Types of Landlord Insurance
Landlords Building and Contents Insurance Policies
there are many types of landlord insurance policies available, and as with any such policy you must pay attention to what is covered by the policy and what is excluded. As with standard homeowner policies you will find both landlord’s building insurance and landlord’s contents insurance. Buildings insurance is a must, because if anything structural were to happen to the property the cost of repair or even rebuild could be significant. Contents insurance can be tailored to suit your property type and will naturally cost more (but provide more cover) if you rent out your property fully furnished. If your rental property is furnished try and buy a policy which offers “new for old” replacement cover.
Landlord’s Liability Insurance
Landlord’s liability insurance is an important policy which will cover you against most risks (always check the policy wording to see exactly what is covered before purchasing). Personal injury claims are becoming increasingly common, meaning tenants are suing landlords for accidents which may have occurred in the home. Landlords liability insurance will provide you with cover for this sort of claim, plus legal cover should the case reach a court of law.
Loss of Rental Income Insurance
Your rental property is a business first and foremost so your rental income is a big priority. Your buildings and contents policies will cover you financially if the property were to be damaged by a flood or fire for example, but what about the loss of income whilst the property is uninhabitable whilst undergoing repairs? The mortgage lender will still expect you to meet your monthly payments, but without a rental income this can be difficult and could stretch your cash flow to breaking point. A good landlord rental income insurance policy will cover the rental income for a specified time, with the majority of policies covering a period of 12 months.
Landlord’s insurance is a must for anyone owning one or more properties which are rented out to tenants. Insurance policies need not be costly and it is often worth shopping around in order to find a price and policy to suit your needs. Protecting your financial investment is the sensible thing to do and a good insurance policy will be worth the premiums should the worst happen to your property.
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