Whether one is an individual renting out a second home to tentants or a property tycoon with plenty of apartments for rent, whether the property is residential or commercial, they are all termed as landlords meaning that they own the land or apartment. When landlords turn their lands into a paying proposition, that is, when they wish to earn income from the lands they possess, they expose themselves to certain risks. The most common risks are non-payment of rent or damage of property by the tenant. Apart from this the usual home owners risks are also to be considered. So it becomes clear that landlords require insurance against these risks in order to protect their property investment.
Landlords House Insurance policies are also known as Buy to Let policies and they are used whenever a landlord wants to insure his property. The usual home owners policy cannot be undertaken in a case where income is being earned from a property and hence in these cases, Buy to Let policies are taken. Most insurance companies provide an option of Buy to Let policy. It is believed that Buy to Let policies have become an alternative to pension provisions. There are various types of Landlords House Insurance policies. Most of them will cover more than one propery under a single policy. On the other hand, most of these policies fail to cover personal belongings such as furniture, etc.
Buy to let policies should protect the insurer from risks to full replacement cost. A normal buy to let policy should cover all the risks incurred by homeowners as well as certain special risks that landlords who rent their property out to tenants incur. These risks are explained below.
The amount of coverage is usually a percentage of the sum insured. Under the buy to let policy, damage by fire is fully compensated including all repairs and any loss of income from the property due to the fire. Other natural risks such as damage by storm or earthquake are also covered under this policy as also destruction due to civil commotion or riots and accidental damage caused due to vehicles, falling trees, etc. Leakage of oil and destruction due to smoke also falls under the coverage of these types of policies. Subsidence and burst pipes, which are of major interest under any home owner s policy is included as well. Robbery and theft being major concerns for any householder, whether tenant or landlord, is also covered under this policy.
As far as damage from tenants are concerned, this is fully covered by any landlords insurance policy. Vandalism, theft or deliberate damage caused by tenants is fully recoverable. In case of a theft or accidental damage on the part of the tenants the contents are covered if the property is let furnished. If there is any default on rent by the tenant, the landlord need not worry since it is covered by the insurer. The coverage for this type of policy includes all legal expenses that might occur when it becomes necessary to take the tenant to court to recover unpaid rent or for eviction procedures. Any legal liability that the landlord is responsible for because of injury to tenants or other people as well as damage to property is also taken care of.
The premium for the policy is established after taking a number of factors in consideration. Some of the important factors are discussed below. The location of the property is an important consideration. The Landlords House Insurance company will determine whether the property is liable to floods, subsidence, etc. by the location or postcode of the property to be insured. The Buildings Sum Insured is an estimate of the cost of rebuilding the property in case of its destruction. This is usually given by the property owner and must not be confused with the value of the property. In case there is a mortgage on the property, this clause becomes compulsory. The type of tenant you intend to rent the property to also affect the premium. The age and the type of the property are also taken into consideration before the premium is fixed. Details of previous claims must be disclosed to the insurer before asking for a quotation. There are also other factors that are examined depending on the policy chosen.
It is important to give the correct information so that the right premium may be established. Since this premium is a percentage of the total sum insured, it is in the interests of the landlord to protect his property. Whatever the purpose of the property, a buy to let policy or Landlords House Insurance policy is suitable when any kind of income is gained from the property. In fact, it is not only suitable; it is also important and necessary.