Letting out a property is something that you presumably do for profit and you perhaps rightly regard that property as a major asset. Yet without the correct form of letting property insurance your asset may be wiped out without any form of compensation if the unexpected does happen.

Property as an asset

Many people believe that it is sensible to take steps to protect their assets.

The first stage in this is, of course, prevention. Few of us would leave our property without, for example, some form of security in place such as locks, bolts and perhaps alarms. When going away on holiday we sensibly switch off electrical systems and possibly drain down water systems etc.

Unfortunately though, however careful we are, things can still go wrong.

Natural disasters can arise. Burglars may be able to enter even well protected properties and vandals may suddenly take it into their heads to leave their mark on your property.

That’s why the second line of defence in terms of protecting your asset is property insurance so that if something goes wrong, you have a degree of financial support in place to help to recover.

Letting property insurance

In the case of rented property, the landlord insurance required needs to be fit for purpose – in other words a policy specifically covering rental properties.

This is the case because standard owner-occupier buildings and contents insurance typically will not cover rental properties or provide buy to let home insurance.

The risk profiles of rental versus owner-occupied properties are simply different and the insurance policy needs to reflect that. For example, your property is at risk from a variety of tenant related issues that simply don’t apply to an owner-occupied house.

One such example may involve accidents suffered by tenants as a result of your property and their subsequent claims against you for compensation.

Letting property insurance needs to provide cover against some forms of risk that typically do not arise for owner-occupiers.

Landlord and let property myths

You may sometimes come across people offering apparently sage advice that is, in fact, quite simply incorrect and potentially dangerous including:

• the insurance company won’t know you’re renting it out – wrong, in the event of a claim they can check the occupancy status and you may find that not only is your claim rejected but that you’re held to be guilty of making a fraudulent claim;
• you’re only renting out a room or two so you’re not a landlord – untrue, if you obtain income from renting out even part of your property you may be deemed a landlord and therefore in need of letting property insurance.

Typically, buy to let buildings and contents insurance may only be moderately more expensive than an owner-occupier property. Taking chances with your asset’s insurance for the sake of relatively small savings may not be a wise course of action.

Sleeping easily at night

Your property asset is very possibly a major part of your overall financial position.

Seeking to make sure that you understand your risks and that you have the right form of letting property insurance in place may simply be common sense.

Tags: Letting property insurance

This entry was posted on Saturday, May 8th, 2010 at 8:13 am and is filed under Low cost landlord insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.