If you are thinking of renting out a property that you own, you need to think very carefully regarding what insurance you will need. There are many things that can go wrong when you have tenants in your house, which is why you need to be protected against those unforeseen events.
Accidents do happen
Your tenants can be the most careful in the world, but accidents do happen. They might spill red wine on the carpet by mistake or accidentally forget to turn the bathroom taps off, and end up flooding your property. Someone might break into the place or a fire could happen when no one is home, and you need to be protected for when things like this do happen. Standard contents and building insurance is not enough when you become a landlord.
You need to let your insurer know when you are planning on renting out your property, otherwise they will not cover you in the event of a problem occurring. You will need to get specialized landlords insurance to cover you – look online for CIA landlords insurance to find the best cover for you.
You have a lot of money tied up in your property, so do not go for the cheapest deal you can find, check that the policy is going to give you all the protection you need. Landlord insurance comes in a few parts, so you will need to figure out which ones you really need.
Landlord buildings insurance is something that you absolutely must have, because it protects the actual component that make up your property. Building insurance will cover the cost of rebuilding in the event of a fire or flood, and therefore give you peace of mind.
Landlord contents insurance is another very important piece of cover, especially if you rent the flat or house fully furnished, because it protects your carpets, couches, beds, TVs and other items from damage or theft. Try to look for a policy that will replace your possessions on a “new for old” basis. You are not required to insure your tenants’ possessions – that is up to them to do.
Landlord liability insurance is yet another important part of safeguarding yourself. Personal injury claims have increased in the past few years. Part of the thanks can go to ambulance-chasing lawyers, who get business from people who have suffered an accident or injury and try to convince them to make a claim for legal compensation. They promise that you will not pay unless they win your case. Some claims reach £100,000 or above, and although most average at about £5,000, you still need to consider protecting yourself against those litigious tenant.
Loss of rent insurance is vital if your property is damaged or destroyed. If your property is damaged in any way, you cannot rent it out, and this insurance will replace the rent that is lost. This is very important if you have a large mortgage on the property, and are using the rental money to pay the monthly payments.
Legal expenses insurance covers your legal costs when disputes with tenants arise. It includes repossessing the property, evicting squatters, and any other issues with tenants. You may also extend your policy to cover all the legal costs involved in getting back any outstanding rent.
Landlord home emergency cover will pay you out for the cost of emergency repairs after, say, burst pipe, a gas leak, pest infestation or break-in.
Policies will normally cover labour and material costs, and the call-out fees that are involved. It ensures that you will be helped by a qualified tradesman, who will be available to sort out any household emergencies at any time of the day throughout the entire year. It may seem like a lot of insurance to organize, but most of it is not as expensive as you may think.
A lot of the time, your insurer will offer a variety of different types of cover, or they will be able to bundle them together into one policy for you. Renting to strangers can be risky and you want to make sure that you are properly covered if something does go wrong.