As a landlord, it is vital that the right procedures are put in place to protect your investment property.
Challenges in the rental market continue to demonstrate the importance of protecting assets in case problems arise. Insurance plans can help landlords by covering damage and issues regarding their properties.
Here we break down what landlord insurance involves and what purpose it serves to help landlords decide whether they need to invest.
What purpose does landlord insurance serve?
Landlord insurance is built to protect rental properties. There is no legal obligation to have landlord insurance, but this can act as a much-needed safety net.
A landlord insurance report revealed that over one in ten landlords admitted to not having landlord insurance. This means more than £600 million worth of expenses, which could be reimbursed through insurance, are paid by landlords.
Below is a list of the main issues associated with rental properties that landlord insurance can cover:
- Boiler breakdowns
- Loss of items belonging to the landlord
- Legal costs that arise when taken to court
- Damage from fires, floods, or theft
- Damage to built-in features such as kitchens and bathrooms
- The building structure
- Damage caused by tenants
- Vacant periods
- If the property cannot be let because of damage
- Rent arrears
Types of landlord insurance to consider
Landlords can tailor their insurance plan to their specific requirements. These allow landlords to protect themselves against a range of scenarios that could happen.
If a fire or flood causes damage to the home, building insurance would cover this. Landlord contents insurance is particularly useful for landlords letting a property that is furnished. This will help fund costs for damage to furniture caused by a tenant.
In instances when the tenant cannot pay rent, rent guarantee insurance will protect the landlord. If a tenant makes a claim against a landlord, the property owner’s liability insurance will cover the legal costs.
If plumbing, drainage, heating, or power supply fails, landlord emergency cover will provide 24/7 emergency assistance. Unoccupied property insurance can be relied on to safeguard buy-to-let properties that are empty.
The current market calls for greater protection
Landlords and tenants are currently paying far more for the essential costs of running their homes and rising interest rates are also pushing up mortgage payments.
These challenges in the current market call for landlords to further shield their businesses and rental properties.
Large sums of money will be lost if protective measures are not in place. However, landlords can guard themselves by making use of insurance policies.
The size of the property and the type of package opted for will determine the overall cost of the insurance plan. This typically costs up to £220 each year, yet on average, a landlord insurance claim results in a payout of £6,512.
The market is changing and landlords hoping to get the best outcome must make sure they are protected. Although landlord insurance might seem like another unwarranted fee, it could end up being a lifesaver.
You need to work with an experienced, reputable letting agent. Here at Kings Group, we can help you to remain compliant and get the most from your tenancies.
For more information on how we can assist you on your letting journey, please contact one of our branches in Essex, London or Hertfordshire today. We also offer a free and instant online valuation to give you an idea of how much you could be charging in rent.
