Avoid the 5 Costly Sins of Landlord Insurance
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You have made the important decision to become a landlord; whether you own a single rentable building or multiple houses, there are now many points that need careful consideration. You will need to consider what type of letting you will offer, furnished or unfurnished, there will be legal formalities to undertake and most importantly you will need to start considering your insurance to protect both you are your investment. This can be a very confusing time, with multiple insurance companies offering different forms of cover, on top of all your other duties as a new landlord. However, get your insurance wrong and you could be in for a costly mistake. To help you avoid this from happening, here are the top five insurance sins and how to avoid them.
The Cheapest Insurance Will Be Enough
Let’s face it, you have given up a lot of you time, money and sweat getting your property ready for the rental market, so do you really want to only have the cheapest landlord insurance available? It may seem like the easier option at the time, but quite often these less costly insurance plans will not cover the wide realm of issues that can arise. You need to look at a policy that also includes any vehicles that you are using for your new business venture.
Tenants are human beings and although you may believe that they will treat your property the way that you do, the answer is that they may not. Accidents happen and when they do it is better to have taken out insurance that can cover all damages, flood, fire, gas etc, than to have to foot the bill in the end.
I don’t Need Qualified Advice
If you know what is what when it comes to insurance, then you may not need to seek professional advice. If this is your first time in the role of landlord then you should seek to know and understand everything before signing on the dotted line. There are many forms of insurance to consider; much like entering any self employed business, there is public liability insurance, landlord business insurance and a whole host of other forms for you to look into. As with any business, if you look upon being a landlord as a form of income, you will need a mixture of many insurance plans.
Remember, that by seeking professional advice, you will make sure that you are personally covered but also that your tenants are also safe.
All Policies Are Pretty Much the Same
This may be true to some extent, but to truly get the RIGHT policy for your needs, you need to do your homework. Start by looking at what you offer to your tenants; is the house furnished, is it mainly gas utilities, what is the area’s crime level? Your business insurance needs to take these specifics into consideration. For example, if the property is in a high crime area then this needs to be your main insurance priority.
Do some local and countrywide research before signing up to the correct insurance for you.
It is Best To Always Renew With The Same Company
If you look at this from a purely administrative level, then yes it may be the hassle free option, but do you always stay with the same car insurer year upon year? Most of us simply don’t stay with the same insurer for life and your business insurance shouldn’t be any different. As you do with your own home insurance, have a look once a year at what other companies are offering.
I Will Just Get Owner-Occupier Insurance
This is perfect if you are living on site and not making an income from renting a single room, but if you do make a living from this rent then you may find that your policy isn’t valid when needed in a time of emergency.
You need to know upfront the type of landlord you are, a business landlord who is receiving a regular income from the property or a live-in landlord that is simply paying off some of their mortgage through the help of a tenant.