If you rent out a property, then you are technically known as a landlord and therefore should consider taking out landlord insurance. Here's why:
Protecting Yourself from Legal Claims
Sometimes landlord tenant disputes happen. This could be for any reason, such as an injury in the property which was your fault or a tenant feeling you have offered a substandard service e.g. failing to make proper, timely repairs.
In this case, landlord insurance covers you should a tenant decide to take you to court and make a claim. This insurance will cover legal costs and any compensation required, ensuring you're not majorly out of pocket.
Covering the Cost of Damages
Not everyone is clean, tidy and conscientious, therefore when a tenant vacates a property they may leave a trail of destruction in their wake. Small jobs may be rectified by withholding part of their deposit, but in the case of malicious damage this may not be enough to put things right.
Landlord insurance will provide you with the cash to put these problems right, ready for new tenants to move in, as well as giving you money to change the locks to prevent any future issues with disgruntled tenants.
However, if damage is done to the tenants' possessions they will not be covered under your policy. Tenants should take out their own contents insurance if they want to protect their belongings from theft or damage.
Preparing for a Natural Event
Damages aren't always the result of unruly tenants - if there is a fire or flood your property may become uninhabitable. Landlord insurance will not only help cover the costs of making repairs, but will also deal with the rehoming of your tenants while the work is completed.
Situations like this aren't ideal for any landlord. However, it can be especially worrying if you have a large buy-to-let mortgage where you are reliant on rent to pay the monthly charges. Landlord insurance will cover these costs and provide you with peace of mind so you can concentrate on getting repairs completed quickly and to a high standard.
Your Bank May Insist
Whether, it's just the one property or a portfolio of a dozen, it's important to cover yourself from the risks involved. Although landlord insurance is not mandatory by law, in some cases, if you have taken out a mortgage, your lender may insist you take out cover as a condition of your loan.
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