9:37 AM, 5th September 2011, About 10 years ago
Inexperienced landlords can quickly find themselves out of pocket if they fail to protect their property with specialist buy to let insurance.
Rental property must have the right protection as insurers will refuse to settle a claim if standard homes cover is in place.
Landlord insurance is like any other cover – the features, benefits and costs vary between insurers, so here’s a quick guide to the basics for new property investors:
Basic cover is landlord buildings insurance, which is similar to building insurance for a home – but one point to watch for is an unoccupied premises rule.
If a buy to let stands empty for 30 days or more in a row, an insurer will deem the home ‘unoccupied’ and suspend cover. If any claim is made while the home is unoccupied, the insurer will not pay out.
Specialist unoccupied cover is available from some insurance companies and brokers, while a few insurers will include this cover at extra cost. Ask when taking out cover because the property needs cover during refurbishment and voids.
Landlord contents insurance is useful for furnished and unfurnished property. Contents includes carpets, lamp shades, curtains and white goods as well as all the extra items like crockery for a fully furnished property.
Landlord liability – sometimes this is included in contents cover – is a must that protects the landlord for claims of death, injury or sickness to tenants or third parties visiting the property. Common claims are slipping on loose carpets.
Another option to consider is rent guarantee insurance. This pays legal costs and unpaid rents if a tenant falls into arrears.
Cover comes with conditions – generally the tenant must go through a credit check before moving in and pay-outs may be subject to limits.
Many buy to let insurance policies come as a package with an all-in price covering one or more of the above options.
For landlords with more than one rental property, some firms offer property portfolio insurance deals that cover any number of rental homes.
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