Home Insurance - Landlord's Property Insurance

Landlord’s Property Insurance

 

 

With property prices rising and rising, many people have taken advantage of buy to let mortgages, or have used their savings to buy a second house or flat and then rent it out. In many cases it turns out to be a great investment. However, you should be careful not to overlook the need to protect your investment and arrange adequate insurance for it. You can rest assured that if you have not thought of insurance, it is very unlikely that your tenants have either.

 

If you are a landlord, then you really have two choices. Either you require your tenant to arrange insurance for the property in the rent or lease contract, or you take out the insurance yourself directly. This leaves less to chance, and you can always factor in the price of insurance when you calculate the rent you want to charge.

 

It is important to be aware that insurance for a property that you are renting out differs slightly from the insurance that you will take out for your own home. While the risks will generally be the same, and you will want to insure the building to the same extent as your own home, the risk to the insurance company is not always the same. They will probably tell you that people who own the home they live in tend to take better care of it then people who rent, and this is the main reason that landlord’s insurance costs a little bit extra. If you have normal home insurance and then rent out the property without letting the insurance company know, then you risk voiding the policy. This could potentially leave you with no protection at all.

 

Also, as a landlord, you may have difficulty making sure that you keep to all of the conditions of the insurance policy. For example, many insurance policies require that you do not leave the property empty for extended periods, that you have the heating system maintained properly or similar provisions. As a landlord it may be difficult to ensure that these conditions are always met. However, you should certainly have them built into the rent contract so that your tenants are aware of the conditions. That way, if you do have to make a claim, you will be able to show the insurance company that you have taken reasonable steps to stay within the conditions, and also your tenants will generally be willing to make sure that the conditions are kept if they know they are necessary for the insurance. At the very least, they can let you know if a condition will not be kept so you can arrange to do so yourself.

 

Also, do not be tempted to be less than honest on the insurance application form. If the policy states that only two people are to be living in the property, then do not rent it to three, and if you are planning on renting to students, then make sure you tell the company. This is necessary as insurance companies will not be slow to avoid paying out because of issues such as these which were not properly disclosed.

 

 

This article is from Best Insurance Companies UK web site.