Wednesday 26 December 2018

Concern as 1 in 4 landlords also don’t have specialist insurance

Author: Andrew Page

Although no one wants to think about worst case scenarios, as a landlord, it’s important you plan for all eventualities if you’re going to keep your investment safe and secure. One of the best ways to protect your rental property is to take out specialist insurance. Helping to ensure you’re covered in case of a fire, flood, or another disaster, this insurance will help to provide you with the resources you need to get your property back on track.

However, with 25% of landlords still not covered by specialist insurance policies, many are leaving themselves financially vulnerable. If you’re one of them, take a look at these important reasons to take out specialist landlords’ cover.

Why do landlords need specialist cover?

A standard residential insurance policy won’t cover you for rental activities. If you take out a standard insurance policy on a rental property, you may well find your policy is invalid when you come to make a claim. Landlords insurance, however, has been specially designed to cover rental properties. It protects landlords from the risks often associated with letting properties and includes landlord-specific covers, such as property owners’ liability, loss of rent and tenant default insurance. This specialist insurance can generally be claimed back against tax at the end of the financial year. Talk to your mortgage provider to find a policy that suits your needs.

Is landlords insurance a legal requirement?

In general, landlords try to keep the costs associated with renting a property to a minimum in order to maximise their profits. This means that many won’t take out extra cover unless it’s a legal obligation. As @HomeLet explains:

“If you’re the owner of a property that you want to rent out there’s currently no legal requirement which states that you must have insurance. However, if you have a buy-to-let mortgage on your property, your lender may specify that you must have insurance in place.”

This means that most landlords who have a buy-to-let mortgage will be required to take out landlords insurance by their mortgage provider. If they don’t, it could invalidate the terms of their contract and lead to problems obtaining a mortgage. For landlords who own their properties outright, insurance isn’t required, but it is a good idea. Protecting the landlord in case the tenants damage the property, fail to pay or are injured while living in the building, these specialist policies are worth their weight in gold if something goes wrong.

Find out more about landlords insurance, or discuss your own personal insurance requirements by giving us a call and speaking to a member of our expert team.

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Written by: Andrew Page