Insurance for Rental Property

Insurance for rental property

You rent out your property to make a profit and like most business people you are probably prepared to take managed risks from time to time. Unfortunately, your rental property may constitute a huge and unmanageable risk unless you have the right form of insurance for rental property.

Whilst it would be nice to live in some future world where you could put a force field around your property to protect it, as of today that’s not possible and your property is very vulnerable to external forces. There are all the usual but real risks of natural disasters that could cause serious damage to your property and investment.

The risks are not only environmental though. Although the vast majority of tenants are responsible people, some will be less so. Damage can happen to your property, contents and fixtures and fittings as a result of their lack of care and attention or through genuine accidents. Even worse, in a minority of case the tenants could wilfully damage your property and goods or steal them.

Then there are the people claiming risks. If your tenants or people calling on them are injured on your property, a court could easily find you to be liable and make staggeringly high compensation awards against you.

It would be possible to continue but the point is clear as a landlord you have very significant financial exposures that are of a different order to those facing an ordinary property owner-occupier.

Whether you choose to ignore these risks is of course your decision but it would pay to avoid the misconception that standard owner-occupier insurance will meet your needs. It won’t!

The important thing about insurance for rental property is the use of the word rental. Any insurance you hold relating to buildings and contents for an owner-occupied property will immediately become invalid the moment you rent your property out. This even applies if it is a short term holiday rental situation.

The reasons for this relate to the discussion of risks above. Your risks as a landlord are different so you may need to consider different insurance to protect you.

There are specialist suppliers of landlord’s insurance operating on the Internet. They offer a range of insurance for rental property and would be only too glad to help you understand the sort of cover that may be appropriate in your case. So unless you like living dangerously, giving them a call may be a good idea.