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Landlord Insurance Policies
Some people who have recently bought property and are wondering what to do with it may be confused about what the differences are between a landlord property insurance policy and a typical home insurance deal.
Because somebody as a landlord is using a home or commercial premises as an extra source of income, this needs to be protected. For example, the typical home insurance deal might not cover a property if it is unoccupied for a long time, or may be completely invalid if the owner suddenly starts to let it to tenants.
As an investment property, a home might have a different financial impact upon you if it is destroyed by fire, for example. In such circumstances a landlord home insurance policy would pay for the damage no matter how extensive, depending on the policy, and may even cover the cost of any rent that you are missing out on by not having anyone living there during the work.
Deals can also help you if you fall into a dispute with tenants. For example, should they decide to stop paying rent and then not leave, a legal expenses element as part of your deal can pay back the costs you have run up fighting the court case to get them evicted.
Landlord insurance policies
As an investment, property has been tried and tested over the years, whether somebody is looking to support their current income or is looking to the long-term for their property to provide a healthy pension. But with property also comes responsibility, particularly if you are looking to rent it out to commercial or residential tenants. Landlord property insurance policies can be bought which backup the owner's responsibilities and also protect them against some unfortunate circumstances such as fire and vandalism. Usually a lot more detailed and effective than a typical home insurance deal, landlord cover can guard against almost any eventuality and is generally a lot more effective than conventional cover.
For example, landlord home insurance policies often include comprehensive protection for when a home is empty. Whereas some traditional deals on a home insurance cover plan might only protect a property if it is occupied, perhaps expiring after 30 days in some cases, landlord insurance cover can be bought which is fully operative when a property is left unoccupied. An empty home can be a target for vandals or can mean that a problem which would normally be dealt with quickly with like a fire can escalate and cause a lot of damage. A properly-protected empty home need involve no extra stress, particularly if you have spent a considerable amount of time and money on it.
Check the cover
Of course a typical deal will also involve buildings protection, guarding against flood, fire, and storm damage. However, it is important to check the details of any cover plan you settle on, as some but not all will include protection for damage due to terrorism and earthquakes, for example. It may also be worth checking what the definition of storm damage is, and perhaps see if this includes destruction due to falling trees.
Landlords buildings insurance policies can also cover your liability, and even provide payouts towards legal defence should you be sued by a tenant, for example. You can even guard your income from a property, insuring the rent income from it, which would provide a payout in the event you lose out because a home is wrecked and out of action following something like a fire.
This throws up obvious questions, such as what if somebody has bought a number of properties, perhaps half a dozen or more? Thankfully there is often no need to buy an individual policy for each one, a company may offer somebody a deal which covers as many properties as they own, and can cover multiple properties under one deal and one premium.
As with traditional home insurance, a landlords insurance policy deal can apply to the building and so the contents itself. For example, many residential landlords choose to put some basic furnishings in a property and may include things like washing machines and fridges. Such things typically need to be covered by a contents deal, which might not have the upper limit of a traditional home deal, but which will often be quite flexible and normally be more than enough to cover what you would have inside the home.
A landlord buildings insurance policy may come with free access to a helpline, depending on the deal, and will always involve a sum insured - the maximum amount the insurers are willing to pay out in the event of a claim. It is important to get this right, as it involves your own estimate- too low and you may get a cheaper premium but an inadequate pay out should the house be destroyed by a fire.