Some reasons for landlord insurance
In a nutshell, the main reason for landlord insurance is to protect a valuable investment and income-earner – namely the property (and its contents) that is let to tenants to provide the landlord a regular income. Essentially a form of business insurance, therefore, it is also known by the self-explanatory title of buy to let insurance.
Just as there are lots of different kinds of buy to let business, however, so there are a number of different types of landlord insurance, which might cover some or all of the following risks:
- Buildings insurance – the heart of any buy to let venture, of course, is the property itself. The purchase of the property might well be the biggest single investment you ever make, yet the risk of disasters and the cost of repairs are likely to be high indeed;
- Contents insurance – you have probably insured all the personal possessions in your home, so it is important not to forget all the fixtures, fittings and furniture that you own in the property you let;
- Landlord liability – landlord insurance is also typically used to cover against claims from tenants, visitors or members of the public who suffer physical injury or material loss whilst in the or near to the let property. It does not take that much for the cost of such claims to really mount up, so cover of up to £1 million is often arranged for even a relatively small buy to let UK business;
- Damage and theft – many landlords have learned the hard way that not all of their tenants are angels. It is certainly not unknown for tenants to deliberately damage your property or its contents or even to steal the things that you own from the building. This element of buy to let insurance helps indemnify you against the cost of replacement or repair;
- Loss of rental income –You may suffer a loss of rental income if the accommodation cannot be used following damage caused by an insured risk that needs to be repaired. This element of cover is typically designed to compensate you for any loss of rental income.
These are just some of the risks typically covered by landlord insurance. When choosing your buy to cover, do bear in mind that some policies may offer different product features and benefits, so do ensure you know exactly what the cover entails.
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