Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
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A conventional home insurance policy does not provide cover, should you decide to let out your property to tenants. If you fail to inform your insurance provider that you will be letting out your property and something should happen to it, then the provider may not pay out. It is imperative that you convert your existing insurance to landlords insurance before you take on any tenants.
There are many similarities between conventional home insurance and landlords insurance. Both of them will cover you for any loss occurring as a result of the usual accidents, damage and calamities that can occur to buildings, the fixtures and fittings, and the contents.
Landlords insurance includes additional cover; some of which is necessary and some of which is optional. These include: landlords liability, which covers you against claims brought by tenants; employer’s liability which is required if you employ anybody; rent guarantee, which covers you should your tenants fail to pay the rent, and squatters insurance, which covers you for the costs involved in dealing with squatters.
Generally buildings and contents insurance are taken out with the same insurer, but this is not necessarily always the case. For instance, if you are letting an apartment in a block of apartments, then generally the building insurance is taken out for the whole block and the cost is shared by all the tenants. In this case, a separate landlords insurance is taken out for the contents and the additional items listed above.
Be aware though that when using separate insurers everything covered is properly defined. Sometimes laminate floors are considered to be part of the contents and sometimes as part of the buildings. This could result in both your contents insurance provider arguing that the buildings insurer should pay for damage to your floor, and the buildings insurance provider arguing the opposite, leaving you with the possibility of uninsured losses.
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