If you’re considering becoming a landlord with no real prior knowledge of how it all works, one of the first things you might ask yourself (or Google) is “how does landlord insurance work?”. Despite how it may sound aloud, it’s not so daft a question as you might think. And it certainly is something that you should be thinking about if you’re considering becoming a landlord. Not a daft question at all!
Though insurance is currently not a legal requirement for landlords, the real daft question is “can I get away with not having landlord insurance?” – the short answer to that is yes. Yes, but no. Though legally you are not required to be insured as a landlord, you could be in for a world of financial pain if you have no intention of getting insured.
So back to how landlord insurance works….
It’s not expensive, and it’s easy to get a landlord insurance quote, so there’s no good reason not to have it. You don’t need a list of all the things that could go wrong to know that protecting yourself against them is a good idea. You know how people can be (some people are just bad tenants; but a lot are good), and how things sometimes just happen even if you do have good tenants. Often times, it’s beyond our control. Sometimes during a dinner party, someone laughs a little too hard and spills their glass of wine on your carpet. It happens. Landlord insurance can help cover the accidental damage, as well as other (potentially more serious) incidents.
A good landlord insurance policy will cover:
Though you could just take out a standard buildings insurance policy, having an insurance policy that is specifically tailored to the requirements of a landlord better protects you from the unforeseeable. There’s a huge number of risks that a standard home buildings insurance policy just won’t cover. And, as a landlord’s building property is his/her most valuable asset, he/she needs to ensure that they will be compensated for any financial losses if the building becomes damaged in any way. That’s just good business.
Not only that but if you have a mortgage on your property, you may find that you will be required by your mortgage lender to take out landlord insurance before you rent out the place. You will have to discuss all this with them either way, as you may need written consent to even let the property in the first place.
Don’t forget that as a landlord, you would have responsibilities to tenants. You don’t want to become too involved with them on a personal level, but you still have to have some kind of presence in their life as their landlord – and not just as another account number and sort code that they pay money to each month! Scheduled inspections will help you to identify any issues within the property that may require attention, before they get any worse. Inspections will also encourage your tenants to maintain the property.
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