Landlord's Insurance – What you need to know
As a landlord, sorting out your insurance policy is probably not the most appealing thing on your to-do list
. Nevertheless it is essential to protect your business, so let us help with a few essential pointers on what you need to know when it comes to landlords insurance.
What is a Landlord?
The first thing to make clear is the definition of a landlord, because there's often misinterpretation. A landlord is someone who rents out their property or part of their property to generate income. Some people think they are not classed as landlords if they let out their property over the summer months as a holiday-let, or if they are renting out a single-room in their home to a student during term time, or even if a relative is paying them to live in a vacant flat while they are away.
The definition of a landlord is important when it comes to insurance, because once you have established you are one, your position fundamentally changes. In the insurance world, you are no longer an owner-occupier, and you require a specialized landlord's insurance policy.
What is Landlord's insurance?
Now you have established you are indeed a landlord, the next thing to consider is
landlord's insurance. As a landlord, your insurance responsibilities change as well as your risk profile. This is because insurers deem rented properties as higher risk than owner-occupied ones. Landlord's insurance specifically covers these additional risks.
You must also be aware standard owner-occupier buildings and contents insurance policies typically do not extend to rented properties. You will need a landlord's insurance quote and a landlords insurance policy.
Are the risks higher?
Yes, the risks for landlords are higher. This is mainly because a rented property is open to additional risks of threat, damage and third party claims simply because there are tenants involved. Risk is also increased because a rented property is more likely to be left vacant more frequently that an owner-occupied one.
Although you may be looking at a higher insurance premium, landlord's insurance should never be compromised. For instance, if you try and make a claim relating to a rented property on a standard home insurance policy, it is more than likely to be automatically invalidated.
Since the risks involved in renting property are much greater, it does pay to get landlords insurance.
Landlord's Insurance What you need to know
By: Sasin.morgan
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