Why You Need Landlord Insurance
Landlord insurance for renter property is the ideal choice for homeowners who want to be on the safer side.
Every landlord deserves the best property protection they can get. A landlord insurance policy safeguards yourself, your assets, and your tenants. You will typically be asked to obtain a specialized landlord policy by your mortgage lender because standard home insurance plans aren’t intended to cover rental operations.
Is landlord insurance required by law?
A landlord is not required by law to purchase a certain insurance plan. However, a typical house insurance policy won’t protect you from rental operations, and if your property is mortgaged, your lender will probably demand that you obtain insurance before you rent it out. It’s vital to keep in mind that before you rent out your house, you’ll often need formal consent from your mortgage lender. If you don’t acquire this, you can be in violation of the conditions of your mortgage.
Landlord insurance for rental property comes in various options. You may decide to go with buy-to-let building insurance, contents insurance, and property owners’ liability insurance. You can discover more about these variations on our landlord insurance vs homeowners insurance blog post.
What if I’m renting to family relatives; is landlord insurance needed?
Even if you are renting to family relatives, you will need a landlord insurance policy because a standard house insurance policy usually won’t be applicable if the property is being rented out.
However, in order for your insurance to be valid, a tenancy agreement must typically be in place. Also, keep in mind that you must have your mortgage lender’s permission.
What is typically covered?
When you take out landlord insurance, the following would be covered:
Landlord’s liability – as the property owner, you will get cover for all legally obligated amounts payable for injury, illness, or accidental death to tenants residing at the property. The cover will also include legal fees, costs, and expenses of anyone that brings claim/court proceedings against you.
Loss of income from rent – you will enjoy protection against loss of rental income in the event that your property is rendered unsuitable to dwell in because of damages insured in your policy’s building section. Generally, the maximum amount you may get will depend on the amount stated on the schedule.
Buildings & contents – cover for damages or loss regarding your property is vital to protect you from the following risks:
- Fire, explosion, lightning, earthquake
- Attempted theft or theft
- Storm and heavy flood
- Heave, landslip, and subsidence
- Water escaping from domestic appliances or heating or fixed water installation
The belongings that you possess and have made available to tenants will be safeguarded by the insurance policy known as “contents cover.” If there is a loss, it is possible to safeguard things like electrical equipment, carpets, and drapes, along with other furnishings. Your tenants should be responsible for their valuables by taking separate renters insurance.
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