insurance
“A dedicated landlord insurance will usually include buildings cover, which can pay to repair or rebuild your rental property”
tile, or a neighbour’s car was damaged by debris falling from your rental property, a liability insurance could be used to cover the legal fees or compensation pay-outs up to the limit of your policy.
Tenant default insurance
Tenants’ rent arrears now cost around £900m annually, with 40 per cent of landlords saying they’ve had a tenant who has failed to pay their rent. Tenant default insurance can help landlords in situations when their tenants’ rent has fallen into arrears as it can cover your rental income for a certain period of time (up to a maximum value).
Legal expenses insurance
Landlords can incur rental-related legal costs if something goes wrong and they need to take action, for example to evict their tenants or pursue unpaid rent. Landlords’ legal expenses insurance can cover the legal costs in situations like these.
Accidental damage insurance
You can add accidental damage cover to your buildings insurance and/or contents insurance so that you’re covered in case someone has an accident that causes damage to your property. For example, if a guest stained an expensive carpet with a wine spillage, or if a DIY project went wrong and caused costly damage to the property. Since damage to landlords’ property costs an estimated £4.5 billion a year according to an Access Legal survey, this could be a cover worth considering.
Choosing your landlord insurance
Here are some tips on how to determine what policy would be most suitable:
Landlord insurance isn’t a legal requirement, but you should check your mortgage documents and your lease to see which insurance covers they require
If your rental property is a flat and the freeholder is responsible for insuring the building, you may want to take out fixtures and fittings insurance instead of buildings insurance
Once you’ve decided which covers you need, you can choose to buy them in a single landlord insurance policy
Different landlord insurance providers offer different covers, cover levels, exclusions and excesses, so it’s a good idea to compare quotes from a few different insurers
Your property’s rebuild value is not the same as the market value. You could use a rebuild calculator to get an estimated rebuild value (limitations apply), or hire a surveyor
Note that if you don’t have a buy-to-let mortgage because you’re an ‘accidental landlord’, you must inform your mortgage lender as soon as you begin renting your property. If you don’t, you’ll be breaching your mortgage conditions, and your insurance will not be valid
The price of your landlord insurance will depend on the cover and cover levels you pick, plus details about your property like the location, the tenants and the security measures you have in place
Jade Wimbledon is a writer for Simply Business, an online small business and landlord insurance provider
30 | HMM January 2017 |
www.housingmmonline.co.uk
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