by Angus Ryan
9:38 AM, 8th February 2012, About 10 years ago 11
Buildings insurance for a property is generally the responsibility of the owner or landlord. Tenants must still take out contents insurance to cover their possessions if they want to be protected against theft or fire damage, though for example. This is even more relevant in a House in Multiple Occupation letting to students or professionals.
If you are a landlord renting out a furnished property including HMO’s you will be well advised to take out contents insurance to cover your own belongings, personally, I usually take out £10,000 for the contents of a furnished HMO. I will also consider taking out some contents insurance for self contained units in not so desirable areas where there is a higher risk of malicious damage by the tenant or a break in.
You need to purchase proper landlords property insurance with Public Liability (in case your tenant is injured in the property) and Employers Liability (in case an employee gets injured in your property), Loss of Rent and malicious damage. It is vital to check that your policy covers malicious damage by the tenant as this has saved my bacon on several occasions with several of my properties in not so good residential areas. I would also recommend that you take out Legal Expenses cover in case of a tenant dispute, say a tenant is trying to sue you over an alleged house disrepair, contract dispute or repossession you’re covered. Your legal protection policy will also recover rent arrears where possible e.g. where an ex-tenant is absent but there is a guarantor.
I had one rather unfortunate experience when a tenant sued me for disrepair in connection with a flooding insurance claim. I had to employ a solicitor to defend my case which cost me hundreds of pounds in costs and damages to the tenant as it was not economical to defend the case all the way to a court hearing even though I was not entirely at fault. Solicitors are notoriously expensive and so taking out legal cover for about £70-80 per annum is a real MUST.
One of the quickest ways to save pennies is to switch your insurance deals. Whether you have building and contents cover or a special landlord insurance policy, chances are you could find a deal that is not only cheaper, but provides better cover. For example last year I saved almost £800 by switching and it was better cover! The market is constantly changing so an annual review of all your insurance products could really pay off – just make sure you check your policy details rather than choosing on price alone. A cheap policy is worthless if it doesn’t pay out when you make a claim. Some insurers will include property emergency cover with their main policy which is a useful add on.
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