Whilst there is no law requiring you to have insurance on your buy to let property investment, it is very unwise not to. Most buy to let mortgage lenders will not lend to you if your property is not insured, and as often your property is your most valuable asset, the cost of the insurance is very worthwhile.

Landlord’s insurance is a product particularly designed for landlords. For example, landlords insurance has additional for things like Loss of Rent, Rent Default, Tenant Damage, and damage to the building, fixtures or furniture.

Finding a good landlord’s insurance policy

Ordinary home insurance will not suffice for buy to let properties, due to the income you derive from your property investment and the fact that you let it to tenants who may damage it. The first step to finding a good policy is to check exactly what it covers, so if you do have to make a claim, you will avoid any nasty surprises. There are several types of policy available, so finding the right one for you is all about doing your research. Below are a few categories to explore.

Basic landlord’s insurance policies will cover you for defined or listed events, which are losses or damages caused by anything listed and agreed on in the policy. The next stage up in landlords insurance is Accidental Damage. With this type of policy, any accidents that damage the structure or contents of your buy to let property investment are covered, but it comes with extra cost.

It is important at this point to check whether your landlord’s insurance policy defines “contents” and “building”, and that the policy covers the cost of repairs to the building.

There are two main types of landlord’s insurance policies when it comes to replacing broken items. New for old policies dictate that if any of your property or its contents are damaged or stolen, the insurance company will replace it. In some cases, there is an age limit on items that can be replaced, so it is a good idea to have a value of the items to which this applies. The second type is indemnity insurance, in which the insurer will give you the value of the item that was damaged or stolen.

Liability insurance is a very important section of landlord’s insurance. This protects you against claims from tenants if they have suffered in any way whilst on your property as a result of negligence by you. Law suits can be expensive and complicated, and it is best to have liability insurance which will help in the event of a claim by a tenant.

All of this sounds very complicated and expensive, but it need not be. There is a very competitive market for landlord’s insurance, and by shopping around online, you should be able to find a great deal at little extra cost; and it is always worth it in the long run to ptotect your investment.

This entry was posted on Friday, October 24th, 2008 at 3:30 pm and is filed under Landlords. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.