Anyone renting out a property will need to take out insurance in case the worst happens. While this may seem pessimistic, it’s actually realistic and about financial health and common sense.
Some things to consider would be if you would be able to afford to repair the damage caused by a flood- and find somewhere for your tenants to stay while the house is repaired. Another common problem that landlords face is when tenants simply fail to pay their rent- if you’re relying on this money to cover your mortgage (as most people are) you could therefore end up with serious financial problems.
If you’re a landlord, you’ll need insurance that has been specifically designed for landlords. If you’re letting out a property but only have standard insurance in your name and you need to make a claim, there’s a high chance your insurance company would refuse to pay out, and you’d be the one out of pocket for failing to have adequate insurance as a landlord.
It’s also important that you let your insurer in the loop if anything changes. This means if your tenants change, and especially if you have any periods of time when the property is empty. Often, insurers won’t cover you if your property is empty for more than a month at a time, unless you’ve specifically arranged for it to be covered.
A lot of firms will offer landlord insurance which is specialised, and both the premiums and level of cover will vary, so it’s a good idea to carefully compare different policies to ensure you get the best possible deal. Keep in mind that while it’s nice to have low premiums, if you have to make a claim, you’ll often get what you’ve been paying for and the cheapest option is not always the best.
Buildings insurance is another important consideration, and this will cover the structure of your building, along with any fittings and fixtures that are damaged by many different risks, including storms, floods and fires. Sometimes your bank may insist that you take out this type of insurance in order to get your mortgage approved.
It’s also important to remember that your specific situation will depend on which region you’re located in. Landlords Insurance provider HomeLet have recently released some interesting and helpful information for landlords and investors, detailing the current market trends across many spots within the UK, and expert insights into some of the current issues considering investors and landlords.
If you’re a new investor, it can seem overwhelming as you try to navigate all of the different rules and changes, while keeping up with the news, economy, and everything else concerning landlords and investors.
Spend some time learning about the current housing trends in your area, or within the areas you’re looking at buying in. Looking at past trends and future predictions can greatly help you make an informed decision, and once you’ve bought your property, landlord insurance will help you reduce your risk and keep it safe.
