Investing in property can be a lucrative business, but since this investment option is prone to damage and wear and tear, your finances may be affected. This guide will help you understand what to look for in a landlord insurance policy and protect your rental property from loss caused by damage.
Anyone who has bought a property – either for investment or as their own home – will know how important it is to protect the buildings and contents against damage.
While a number of natural issues, such as flooding or storms, can cause damage to your home, your rental property is also prone to the same disasters. However, there are additional factors that you must protect your investment property against.
As someone else will be living in your investment property, you also run the risk of damage caused by the tenant and loss of rent if they are forced to move out. In addition to standard covers, a good Landlord Property Insurance policy will include protection against issues that occur as a result of the property’s tenanted status.
Always look out for a policy that includes cover for malicious damage by the tenant – this is when the person you are renting to has purposefully caused damage to the property.
Additionally, you may find that your property has suffered unauthorised alteration – this means that the tenant has made structural changes to the property that you did not approve, such as turning it into a cannabis farm, knocking through walls, or damage to property boundary walls or fences. Good landlord insurance will ensure you are still protected, even if your tenant does make such drastic changes to the property.
Something else that you will have to think about when your property is tenanted is loss of rental income and alternative accommodation for your tenants. If your property does suffer damage, not only will your investment experience loss, but your tenants will also be without a home. Make sure that your policy covers your loss of rent and alternative accommodation for your tenant when your property is uninhabitable.
It is also good to look out for cover for carpets, curtains and white goods, as these can also suffer damage during a tenancy.
Similarly, you may forget that you require legal liability cover if you rent out a property. Find a policy that covers you for anything you could be taken to court over, such as your tenants having an accident in your property. A good policy will provide this protection as standard.
So your property has experienced damage and requires work – what do you do next?
As soon as your property becomes vacant, it is advised that you check your cover and continue protecting your investment with Unoccupied Property Insurance.
Your landlord insurance provider will allow you to easily change your policy from tenanted to unoccupied, so that you receive the appropriate level of cover while your property undergoes renovation.
However, be aware that the level of cover you require may be based on the amount of work needed to bring your property back into a rentable state.
It is important that you specify in detail what works will be undertaken to your insurer to make sure that you have the correct cover protecting your property.
When your property is damaged and in need of repair, the last thing you want to worry about is whether it is protected – always choose a level of cover that will ensure your investment property is as secure as you’d hope your own home is.
For the ultimate peace of mind, use a specialist, market-leading landlord insurance provider, such as Just Landlords
By Rose Jinks, of Just Landlords.