Whether you are simply letting your property because you are working away from home for a while, or are letting property on a larger scale, and for commercial purposes, every landlord knows that there is always a risk of ending up with a problem tenant. That nice young couple who moved in six months ago may have seemed delightful when you handed them the keys, but when they left the property in a filthy and damaged state and without paying the last two month’s rent, your blood probably started to boil.
The majority of landlords take pride in their properties, and spend considerable time and money to ensure that they are in good condition before tenants move in. Naturally, it is expected that the tenants too will do their part, and keep the property in good order, including keeping it clean and attending to any minor accidental damage that may occur.
But what can a landlord do if the tenants do not keep to their side of the bargain?
Just as you protect your own property and belongings by insuring them, so too you should protect your rental properties by ensuring that you take out adequate landlord insurance.
As with most forms of insurance, there are many different policies available to landlords, and so you need to do your homework carefully and, where necessary, seek expert advice. However, whether you are entering the letting market for the first time as a new buy-to-let landlord, or an experienced landlord looking after several properties, you need to ensure that you understand just what landlord insurance is, and how it can be of benefit to you.
A good policy for anyone who is letting out property will include:
Landlord Buildings Insurance – This is the basis of any policy, and is designed to cover the cost of repair to the fabric of the property in the event of damage. It should also cover the cost of rebuilding your property should it be damaged beyond repair. In this latter case, it is important to ensure that you understand just what damage the policy covers you for. For example, a policy might cover you for damage due to fire, but not for damage caused by flooding.
Landlord Contents Insurance – If you are letting your property either fully or part furnished, then you will certainly want to consider insuring the items you have in the property against loss or damage. Such things as carpeting, furniture, kitchen equipment and televisions can represent a considerable investment, and be costly to repair or replace.
Landlord Liability Insurance – More and more people are making personal injury claims these days, and courts routinely award claimants tens of thousands of pounds for what most of us would consider to be quite trivial injury. In this climate, it is a good idea to cover yourself against claims by your tenants, and other visitors to your property.
In most cases insurers will offer to extend your cover for a small additional premium, and there are two areas of extended cover that are well worth considering.
Rent Guarantee Insurance – Tenants can certainly cost you money if they damage your property, but they can also cause you to lose money if they fail to pay the agreed rent. It is possible to insure against this eventuality, and in certain circumstances, to even cover the loss of rental income when you are between tenants.
Legal Expenses Cover – Although problems between landlord and tenant can usually be sorted out without resorting to legal action, there are times when a landlord will be left with no alternative but to take a tenant to court. Legal expenses cover can be used to cover court costs in this event.
These are just some of the basic facts about insuring your rental properties, and you should investigate this subject in greater depth and, if necessary, take expert advice, before asking your insurer for a landlord insurance quote. You can check out major player’s website like AXA Business’ for an idea of what type of landlord insurance plan would most suit you. The secret however is to arrange cover now, before you need it, rather than regret your failure to do so when your tenants wreck your property.
About the Author: Cass Brookes has been a real estate expert and writer for over 5 years. She specializes in insurance and all monetary matters relating to this sector and prides herself on helping others gain their dream homes