Insurance for your Buy To Let property
Being a landlord necessarily involves taking a number of risks, although surprisingly a large number of landlords don't always appreciate just how expensive and damaging those risks can be. There are also a number of landlords who only rely on traditional buildings insurance and home insurance, despite the fact that this not only falls far short of the landlord's financial obligations and responsibilities, but in many cases the policy may not be valid as the landlord isn't a resident homeowner.
When things go wrong, which they inevitably do, landlords don't have the luxury of residential homeowners who can take their time sorting things out, instead having to have work carried out very rapidly, often at additional expense. Relying on home insurance is not enough, and today there is a whole range of landlord's insurance policies to choose from, offering the cover that's needed, with a range of optional extras which can protect the landlord, the property and the tenant.
What Is Landlord's Insurance?
Landlord's insurance covers a wide range of eventualities, from buildings insurance to financial loss, from rent protection to third party liability cover. Basic buildings insurance which is designed for rented properties must cover at least the equivalent rebuild value of the property, so that whatever might happen, the property is fully protected.
But landlord's insurance goes further than traditional buildings insurance, because there are additional factors which need to be considered. The tenant may require emergency re-homing, and this could prove to be expensive. Landlord's insurance can offer landlords the opportunity of being covered for such instances as well as having rent protection included too. Should anything happen which prevents a property from being let, rent protection cover can offer landlords a continued guaranteed income - essential in many instances but especially if the property is mortgaged.
Third party liability cover is another important factor to consider, offering landlords protection should the tenant be injured as a result of any defect, damage of issue with the property. This is highly advisable in any circumstances, but if the property is furnished it becomes particularly important to consider adding this option to the basic landlords' insurance package.
What Are The Different Types Of Landlord's Insurance?
Rather than offering different types of landlord's insurance, policies tend to vary depending on the optional extras available, and the degree of cover. Essentially landlords' insurance takes as it's starting point standard buildings insurance, but offering a much more comprehensive and appropriate type of cover. The elements which make up a landlords' insurance package include:
- Landlords' Building Insurance - This provides cover equal to the total rebuild cost of the property, so that the property is protected under any circumstances. Obviously this will vary depending on the type of property, as well as whether it's furnished or unfurnished.
- Loss of Rent Protection - If the property becomes unusable for any reason, due to damage, fire, flood or essential building works, then landlords can end up footing the bill twice - once for the repairs and again for the loss of rent. Loss of rent protection offers landlords a guaranteed rent payment for the necessary period of time.
- Third Party Liability - If a tenant injures themselves on any part of the property, or on any furniture supplied, or suffers in any way as a result of either the property or supplied fixtures, fittings and furniture, then third party liability cover provides landlords with appropriate cover.
- Emergency Assistance - Whether it's a burst water pipe, broken pipe or faulty gas pipe, as a landlord it's essential to get repairs done quickly. Emergency Assistance will mean that one call is all it takes to arrange for a suitable contractor to carry out the work, covering both labour and materials.
- Rent Guarantee Cover - Should the tenant fail to pay the rent for any period, this optional extra ensures landlords still receive the payments, which is particularly important if the property is still mortgaged.
- Legal Expenses Cover - Legal costs can be very expensive. If the tenant breaches the contract, getting both the right advice and the money to cover the legal expenses required to evict a tenant is essential.
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