|A Guide to Landlord Property Insurance Basics
If you are looking to rent out a property either to friends, family, or to tenants, then you need to put in place some form of insurance for landlords policy. These policies (which may be known as landlord's building insurance depending on your circumstances) simply give you and your tenant(s) protection against any issues that may arise with the building and contents of your property.
If you have a mortgage on your property, then it will be a condition of your mortgage agreement with your lender that there is a policy in place that will at least cover your landlord's building insurance needs. However, most landlords will also add to the coverage they have, and may, for example, take out a landlord property insurance policy for the contents of their property as well. So, whether you already own your property outright or have it mortgaged, you need to think about what kind of insurance for landlords you need.
Protecting yourself and your investment
The insurance for landlords policy that you take out when you are a landlord will cover you in case certain things happen or go wrong. Don’t make the mistake of thinking that you can cover yourself with a standard home insurance building and contents policy; you need one that gives you specific protection as a landlord as you will not be living in the property in the majority of cases. So, what kinds of coverage do you need?
- Building coverage: As the property owner, it is your responsibility to cover any problems that may occur with your building. This kind of landlord's building insurance policy will cover you if your property is damaged or needs repair due to a specific occurrence or structural defect.
- Contents coverage: If you let a furnished property, then you also need to think about contents coverage. This will give you protection in various ways according to the actual landlord property insurance policy you take out. So, for example, if there is a break-in and the thieves steal a TV that you have in the property, then you can make a claim. Or, if a tenant damages an item in your property, then you’ll also have coverage.
- Legal coverage: If something happens to your tenant in your property then they could well hold you legally liable. This kind of insurance for landlords feature will cover you from a legal perspective and pay your costs as necessary.
- Rent coverage: Many people who rent out properties find that they sometimes have problems with tenants paying their rent. This kind of coverage allows you to claim rent payments from the insurer. In some cases, the insurer will also help you get non-paying tenants evicted as well.
At the very least, as a landlord, you should put in place a landlord's building insurance; the chances are that you will have to do this to meet the conditions of your mortgage. Don’t underestimate the costs of replacing or repairing the contents of your property as well. Getting a landlord property insurance policy for this could really pay off if you ever need to make a claim.
And, do not forget that being sued if your tenant gets hurt could cost you an awful lot of money! This is why many insurance for landlords policies will tack on a legal liability feature to give you protection. It doesn’t matter whether you own a small flat or are renting out a huge mansion; make sure that your insurance for landlords gives you coverage for your legal responsibilities as well as for the landlord's building insurance coverage that you need. Finally, don’t panic about buying insurance for landlords and take out the first policy that looks to have all the features you need. You can get good insurance at a much cheaper cost if you shop around.
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