Although there is no legal obligation to have landlord insurance for your Buy-To-Let investment, there are many reasons why you should consider taking out a dedicated policy anyway.
It is worth noting that some letting agents sincerely encourage landlord insurance, sometimes to the point where they won’t manage your property without it! Conversely, tenants can refuse properties without insurance policies in place, as it shows a landlord who does not give due care and attention to his investment and their potential home.
Some landlords think that they can just use their standard home insurance to cover their Buy-To-Let, but they may find that this couldn’t be further from the truth. In fact, many home insurances can become null and void if the property is being used for rental purposes. Furthermore, some mortgage providers require insurances as mandatory, to hold an incorrect insurance or no insurance at all, could breach your Buy-To-Let mortgage.
So, although there is nothing written in the law regarding landlord insurance, it is in your best interest to make sure that you have the correct insurance required for your circumstances.
So what are the benefits of landlord insurance?
Landlord Insurance is a cover that protects your investment from damage, problem tenants and other unexpected costs. The great thing about this type of insurance is that it can be moulded to fit your requirements. Most providers will offer add-on packages so you can create a policy that fits both your budget and your needs.
Here are some of the key benefits that come with most landlord insurance policies:
Buildings cover
Floods, fires, earthquakes, they aren’t particularly common in most parts of the UK, but they are still a very real possibility and one single event can severely damage your largest asset. Everyone thinks that it won’t happen to them… until it does. But how do you prepare for such random events?
The truth is that you can’t really predict these events and so you can’t really prevent them from happening. What you can do, however, is make sure that you are prepared for the worst. Buildings cover makes sure that you are insured if the worst were to happen. It gives you peace of mind that even if your investment goes up in flames, that you are covered and financially protected.
Loss of Rent
In the event that your property is victim to a disaster, as mentioned above, and your property is no longer livable, then it is almost certain that your tenants will need to find somewhere else to live. With alternative accommodation in place, your tenants won’t be paying their rent; who would pay rent for somewhere they aren’t living?!
Landlord insurance offers a lifeline in these disastrous times as it ensures that you won’t be left out of pocket.
It is crucial to be aware that loss of rent cover is not the same as rent protection insurance. The latter will protect you in the event that your tenant can’t or won’t pay and subsequently builds up arrears. Whereas the former covers you for when the property is no longer rentable.
Find out more about Rent Protection Insurance here.
Damage
Malicious or accidental damage? Landlord insurance can cover you for both. Whether it is something done by your tenants, or by a complete stranger, your property is protected regardless. Accidents happen, and sometimes you get bad tenants. Getting insurance that will repair or replace any damages inflicted upon your property is a great way to protect your Buy-To-Let.
Property Owners Liability Cover
It is important to protect your property, but it is also important to protect yourself as a landlord. If an incident occurs that is as a result of your property then you may find yourself liable.
Compensation claims can be very costly and without any insurance in place, this expense will be coming straight from your pocket.
Landlord insurance will give you the confidence to hand over your keys, knowing that you and your property are protected against any eventuality.
So, although it may not be required by law, landlord insurance has incredible benefits for landlords and, if you do your research, is a no-brainer.
So what are you waiting for?
Get your Landlord Insurance today!
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