A look at the different types of insurance a landlord is required to have and the optional policies that can provide further protection.
Regardless of how many years experience landlords may have, it is essential to ensure that the correct insurance is always in place. There are many difference policies available to cover a whole range of situations; the main being:
o Protection against theft and fire
o Accidental or malicious or accidental damage caused by tenants
What’s the difference?
It is important to note that standard insurance policies do not provide the necessary level of cover if you are earning an income from your property, in most cases your insurance will be invalid if you do not inform your insurance provider that your property is let (the same for your mortgage provider).
In addition to insurance polices that cover your actual property and its contents, landlords should consider rent guarantee insurance; so should you find yourself in a position where your tenants leave earlier than expected or you are struggling to find a new tenant, there are policies to ensure that you have a guaranteed level of income.
Other types of cover
There are many specialist insurance companies that offer a whole host of cover to landlords and it is worth considering all situations when you are looking for a policy. For example – how would you cover the cost of rent should your tenants have to move out for a number of months due to fire or flood damage? Not only will you have the costs of the damage to contend with but you will also be losing a chunk of your monthly income.
You should think of your property as a business and consider the risk that all other business owners face. Public liability landlord insurance can protect both yourself and your property against claims from a third party. For example if a slate fell from the roof and injured a passer by.
Contents insurance is also a necessity for landlords and can cover everything from furniture to white goods and electrical equipment. This type of policy would cover only your property and nothing of the tenants – they are responsible for ensuring that they have insured their own possessions.
If you own a number of properties and have a team working for you to manage and maintain them, you must also have employer’s liability insurance – this is a legal requirement. This will cover you in the face of any compensation claims by current or ex employees that may have obtained an injury whilst employed by you.
This guest post has been written by Mr John Evans, a leading broker of rent guarantee insurance.