|What to Look for in a Landlord Insurance Policy:
How to Keep Your Premiums Low
The ideal way to buy any insurance policy is to find the coverage that you need at the lowest cost. It doesn’t matter if you are buying landlord's building insurance, contents insurance for landlords, or legal liability insurance protection—ask any industry expert what to look for in a landlord insurance policy and he/she will tell you the same thing. But, getting the right coverage at the right cost can be hard; some people end up worrying about how much coverage they get and buy too much (which wastes their money) while others buy cheap policies with inadequate coverage (which will cost them money in the event of a claim).
So, whether you are looking for a bare bones landlord's building insurance policy or a multiple occupancy insurance for landlords plan, you need to think hard about what you need from your insurer and how to get it cheap!
What coverage do you need?
Many landlords simply take out buildings coverage to protect their property while others will add a couple of other features such as legal liability and contents coverage. At the other extreme, some landlords will take out every feature and benefit they can get that seems to be worthwhile to them. The coverage you take out here will depend on your own circumstances, but you should be thinking about some of this insurance for landlords or all of the following to start with:
- Buildings coverage - your mortgage lender will probably insist on this in any case
- Legal coverage - to protect you if somebody is injured/dies in your property
- Employee coverage - to help you out if somebody you employ—even on a casual basis—such as a cleaner or handy man gets hurt on your property
- Contents coverage - to help you out if your furniture or appliances need repair/replacement
- Rent coverage - to help you cover costs if your tenant stops paying rent and needs to be evicted
How to cut premium costs
When you are thinking about what to look for in a landlord insurance policy, there are some features that are essentials and some that may not be necessary or may be ‘nice to haves’. So, you should not be without landlord's building insurance and legal/employee insurance for landlords if that is appropriate. Rebuilding and legal costs can be prohibitive, so you will need coverage in this area.
With the majority of landlord insurance policies, however, it is possible to cut costs either by doing away with certain types of coverage or by keeping coverage to a minimum. For example:
- Contents coverage: If you are leasing a furnished or part-furnished property, then think hard about the actual value of your contents before taking out this kind of coverage. Weigh up the total value and compare it to the cost of contents insurance; it may be that it is cheaper not to insure your contents and to simply bite the bullet and buy new stuff if something happens. Or, take out minimum cost contents insurance if that suits you better. And, bear in mind that you can use a tenant’s deposit to pay for costs if they break or damage some of your stuff!
- Rent coverage: Although rent coverage is ‘nice to have’ it may not be necessary to you. So, think about how you would manage without the rent payment coming in; if you could cope for a while, then you may not need this coverage.
Finally, as you consider what to look for in a landlord insurance policy, think about where you look for it and how. If you are buying landlord's building insurance or contents insurance for landlords, the chances are you’ll get it cheaper if you shop around. This is easily done online where search sites will help you assess what to look for in a landlord insurance policy and where to find the cheapest insurance for landlords. And, some insurers selling landlord's building insurance will even give you a discount for buying online which could save you even more money!
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