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Landlord Insurance - a Brief Introduction
It is important to realise that many standard, domestic insurance policies include clauses that complete nullify the policy in the event that a property is let to a third party. It may therefore be necessary to look for buildings, and contents, insurance policies designed specifically for private landlords, rather than standard, residential policies.
There is no actual legal requirement for specialised landlord policies, but a standard landlord package often features several individual products, "bundled" together, and can save time and money in the long run. Most policies include cover for all the eventualities covered by a standard, residential policy, such as fire, flood, theft and malicious, or accidental, damage, but also include an element of landlord liability protection. This may, for example, include protection against claims made against the landlord by a tenant, or a member of the general public, or loss of rent should a property become uninhabitable, for any reason. There may be some restrictions with regard to letting a property to DSS tenants, students, or immigrant asylum seekers.
The list of regulations of which private landlords need to be aware, and with which they need to comply, seems to grow longer day by day, so it may well be worth considering property owner liability insurance in its own right. A typical property owner liability policy covers injury, or death, to a third party as the result of trespass, nuisance, etc, up to a value of £5 million.
As a property owner you have to be aware of, and comply with, an ever-expanding list of legislation and regulation. For example, the regulations to help protect tenants from carbon monoxide poisoning by poorly maintained gas boilers is just one high profile obligation placed upon landlords. Property Owners Liability covers your legal liability for death or bodily injury to Third Parties including obstruction, trespass, nuisance, interference, wrongful arrest and conviction. The level of cover is £5 million.
However rigorous your tenant screening, or however efficient the management company that you employ on your behalf, there can be no complete guarantee that you will not encounter an awkward, or unreliable, tenant, who wilfully withholds, or simply cannot keep up with, rent payments. It may also be that a tenant, through no fault of his, or her, own, falls victim to an accident, or illness, which results in the non payment of rent. In any eventuality, it is wise to ensure against such losses with rent guarantee cover. Lengthy legal proceedings may be required to recover outstanding rent, and, indeed, your property, from an untrustworthy tenant, and this form of insurance can help to soften the financial blow, particularly if you need to keep up mortgage repayments, in the interim.
Legal proceedings may also, of course, involve a court hearing and bailiffs', solicitors' and barristers' fees, which, themselves, can easily run into thousands of pounds for all but the most routine cases. Legal expenses insurance, covering all legal expenses, is therefore often a very precaution.
Conclusion
It is the responsibility of any private landlord to make himself, or herself, aware of the legal requirements relating to the safety of a property, the welfare of his, or her, tenants, and appropriate insurance policies. In the best interests of a landlord, and his, or her, tenants, a rental property should be periodically valued by a surveyor, in order to determine that any ongoing insurance policies do actually cover the full cost of replacement. As a landlord, make sure that you are fully aware of the level of cover that is provided by your chosen insurance policies, and, particularly, any special conditions, or exclusions, which may apply.
If you would like one of Global Financial Limited's independent mortgage brokers to supply you with a no obligation quotation then simply fill in the form and a broker will phone you to discuss the finer points as you would not want to sign up to a mortgage that is not quite what you wanted.
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