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A Guide to Getting the Right Landlord Insurance

Posted on Tuesday, 23 September 2014 09:36AM by Artful Lodger
While it might feel like you’ve done all the hard work after purchasing your property and finishing the renovation, you’ll still need to make sure your property is covered before you can start finding the right tenant and earning some money. Here are our top tips to making sure you get the right cover for your home.

Do You Need Landlord Insurance?

If you are new to property development, you might be wondering whether or not you’ll need to take out landlord insurance. Even if you’re only planning on renting the property temporarily, you’ll still need landlord insurance. Your standard insurance provider will not cover buildings or content insurance while the property is being let out, and it will also not offer any liability cover if someone were to be hurt on the premises.

The Types of Insurance You’ll Need

There are three main types of cover you’ll need to provide:

Buildings insurance: this will cover you against any damage to the property itself by funding any necessary repairs. Some companies, such as Simple Landlords Insurance , even offer free accidental damage cover on buildings insurance.

If your property suffers major structural damage, from a disaster like flooding, a landslide, or a fire, your provider could also pay for it to be rebuilt depending on their terms and conditions. You’ll need to correctly declare the value on your buildings insurance contract and remember that the cost to build your home is not necessarily the same as the price you paid for the property.

Contents insurance: this insures what’s in the home. Remember, you’ll still pay contents insurance even if you are marketing the property as unfurnished, as the insurance will cover damage to any major appliances as well as the floors, carpeting, etc. Make sure that your provider covers accidental damage against both sanitary and glass fittings, as these are the most commonly damaged fixtures in rented accommodation.

Contents insurance will most likely not cover theft unless there is proven “forced or violent entry.” This is so insurance companies don’t have to pay up when a tenant leaves with a kitchen appliance when their contract is up. To prevent this, make sure you demand a deposit at the start of the contract which you can then use to deduct from if anything goes missing.

Liability insurance: this insures you if anyone gets injured, or worse, on your property. This will help to pay for any legal fees that are required. If you are going to employ anyone to work at the property, such as a cleaner or a gardener, you’ll also need employer liability insurance for the same kind of cover.

Finally, remember to check your excess levels in your insurance policy. This will indicate the amount you’re required to pay when you make a claim. Insurance companies enforce this to try and limit the amount of small claims a person might take out. A high excess will lead to a cheaper overall insurance price, but also you’ll want to strike a balance between something that doesn’t prevent you from submitting realistic claims in the future.

Renting out your property could turn out to be a great source of income for you. Always remember to get the appropriate cover and don’t be tempted to undervalue areas of your home in order to get lower rates. The small savings you could make will be grossly outweighed by the costs you’d incur if a serious disaster were to occur.