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A guide to landlord insurance

by | Jul 20, 2016 | Advice, Brokers, Clients

By Rose Jinks on behalf of Just Landlords

Landlord InsuranceIf you are a buy-to-let landlord, you will know that there are many things for you to think about. Don’t make property damage or lost rent be one of them! This guide to landlord insurance will help you protect your investment and keep your rental income secure.

From check-ins to new laws to tax changes, being a landlord can be very time consuming and stressful. But keeping your investment safe does not have to be a struggle.

With comprehensive and thorough cover in place, you can rest assured that your buy-to-let property is in safe hands. Choose a policy that suits your needs and remember to consider all aspects of your lettings business before settling for simple cover.

There are three main types of cover that you should consider. Each of these will provide protection against different types of loss, which would all have a detrimental effect on your buy-to-let business.

If you are looking to protect your investment, the following policies will provide complete peace of mind:

Landlord Insurance

The first thing you will want to protect when investing in the buy-to-let sector is your property. This is the bricks and mortar asset that you have purchased to deliver a rental income and, hopefully, significant capital gains when the time comes to sell up.

Naturally, a property will suffer a fair amount of wear and tear while it is tenanted, but this insurance covers you for the unexpected and additional damage that can occur at any time.

A Landlord Property Insurance policy will cover you for basic damage, such as fire, flooding and escape of water. However, look for a policy that includes additional covers as standard, from malicious damage by the tenant to subsidence. Can you afford to lose out on this protection?

Find out how much cover your landlord insurance provider offers – Do they protect your carpets and curtains? Will you be covered for unauthorised alteration (for example, if your property is turned into a cannabis farm)?

Rent Guarantee Insurance

As a landlord, you always risk your tenants falling into rent arrears. This is when your tenant cannot or will not pay the rent on time. Whether you have just one property or a portfolio of 50 properties, loss of rent can really damage your income, business model and ultimately affect your credit profile.

It is best practice to conduct reference and credit checks on all prospective tenants, to ensure that you are letting your property to someone reliable and trustworthy.

However, anyone can face financial difficulty at any time. To avoid losing out on your rental income each month, Rent Guarantee Insurance ensures that you still get paid, even if your tenant stops paying the rent altogether. A good policy will also cover you for legal expenses if you are forced to evict your tenants through the courts.

While you may have a great property to offer tenants, sometimes they may struggle to pay their rent on time – don’t miss out!

Unoccupied Property Insurance

As with rent arrears, all landlords run the risk of having an empty property at some point. Whether you simply cannot find tenants, or are completing some refurbishment work on your investment, it is vital that you continue protecting your property when it is empty.

Although rental demand is steady in many parts of the country, many factors can lead to your property falling vacant at some point. If you are suffering a void period, it is important that your property is ready for new tenants as soon as interest picks up again.

In certain cases, you may have decided to leave your investment empty for a specific period before you put it back on the rental market. You may be using this opportunity to redecorate after tenants have moved out, or you could be waiting for a big renovation project to begin.

Whatever the reason, make sure that your asset is looked after while it is vacant with Unoccupied Property Insurance. It is good to find a policy that allows you to choose the level of cover you require based on the reason your property is empty.

Landlords, never risk damage to your property or finances by making sure you have the right insurance in place.