Article by Neil Roberts
Any capable homeowner understands the value of securing his or her residence with the proper insurance coverage, thus, landlords with properties occupied by tenants should not have to be told that it is imperative they see to it that those properties are just as well secured. However, statistics show that many landlords erroneously under insure or improperly insure their properties, resulting in a disastrous outcome when they put in a claim and discover that the property was not satisfactorily covered.
If you own a let property, it is crucial that you secure it with satisfactory insurance, or else you take the chance of your wallet suffering a devastating blow when the insurance company denies or underpays on a claim due to unsatisfactory cover. For the insurance to be satisfactory, the first point you must recognise is that regular home insurance is improper coverage for let properties. Rather, you are obliged to advise the insurance company from the outset that you require landlords insurance since the property is occupied by tenants.
A friend learned that lesson the hard way, after he neglected to advise his insurance company that he had moved out of his home, and that tenants had moved in. His reasoning was that since the tenants were friends of his and the tenancy was more of an informal agreement, intended to be temporary while he decided whether to put the house on the market, he did not need to change the status of his insurance. Unfortunately for him, his insurance company did not share his point of view. High winds inflicted minor damage on the building, so my friend filed what should have been a routine claim, and it would have been a routine claim had the insurance company not discovered that he no longer resided on the premises. He received no money from the insurance company and had to pay out of his own pocket for the repairs.
Landlords property insurance contains a variety of practical coverage options that you can settle upon depending on your requirements and budget, but generally at a minimum you will require landlords buildings insurance to secure the actual structure of your property. Furthermore, in addition to being necessary for your property’s security, most mortgage lenders insist upon let properties having at least that level of protection.
Buildings insurance for landlords offers the same security as buildings insurance for homeowners, in that it protects the domicile against destruction wrought by conventional insurable disasters. Thus, if a natural or unavoidable disaster, including fire or stormy winds, destroys the domicile’s structure, you will be eligible to put in a claim with your insurance company rather than have to pay for any subsequent repair work yourself. Additionally, building insurance for landlords includes security against an assortment of other perils, so find out from your insurance company what additional perils are included in the cover they offer. Essentially, you want to confirm that your property is also secured against intentional and avoidable damage, since you are entrusting your property to strangers without having a sure way of knowing whether they are in fact trustworthy.
Meanwhile, it is also important that you take steps to ensure the property is not under insured. If the property’s structure is severely damaged, it will not do you any good to receive a sum that covers the value of the property if that sum is not enough to pay for all the necessary rebuilding work. So, remember that the amount of insurance you take out must be enough to cover an entire rebuilding of the property, as opposed to only enough to cover the property’s actual value.
Since the security of your investment is on the line, do not forget about the supplementary options available to landlords in addition to buildings coverage. These include landlords contents coverage, which if taken out congruently with buildings coverage can result in a discount on your premium, rent guarantee and legal expenses coverage.
About the Author
If you are a landlord and need landlords property insurance for your buy to let property then CIA Insurance can deliver everything you need for peace of mind. We offer a wide range of cover from landlords buildings & contents insurance through to legal expenses, rent guarantee and even DSS Insurance, student and asylum seeker cover.