Help for choosing buildings insurance for landlords
Post date: March 31st, 2010 |
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There is a great deal of difference between the owner looking for insurance and the buy to let owner owner. Suddenly you have new responsibilities towards your tenant, and the property itself takes on the dual role of their home, and your investment. There are a number of things to consider at the outset. Perhaps you might manage the property yourself, or employ an agent? What about maintenance issues? And what are the benefits of buildings insurance for landlords?
Financial security
As the property is an investment, guarding it against risks that could be costly to repair becomes more and more important. When considering a policy you need to check what protection is offered, for instance does the policy include fire, flood and theft damage, is vandalism covered? Without this kind of cover, would you be able to meet the cost of repairs to the property from your own pocket?
You also need to give some thought as to a loss of rent whilst the property is being rebuilt after damage insured in the policy. Accordingly, some buy to let policies will typically cover loss of rent due to an insured risk (though policy features and benefits typically vary, so never make assumptions and always check the small print so you know what the cover entails).
Compliance with mortgage obligations
You might also wish to check the mortgage small print on the property carefully. It is likely that your lender will insist that you insure the structure of the property, and that their interest is either noted on the schedule or that it is made out in joint names. This is because, as a lender, the property is their investment too, and they want to ensure that funds are in place to repair or rebuild it if any serious damage was caused.
Compliance with your obligations in the lease
Buildings insurance for landlords is something that is needed and required by standard domestic leases, because you are likely to be responsible for maintaining the structure of the place. So aside from your own peace of mind, financial security and mortgage obligations, your obligations as landlord may also demand that you have adequate buy to let house insurance in place.