Buy To Let Insurance – Knowing Your Options

2007-03-08 10:33:40

( Financial )



A buy to let property, even if it is just a small unit, is a business property. Therefore, you need to get business insurance, specifically buy to let insurance or landlord’s insurance, and not homeowner insurance to protect your investment and cover you from risks.

There are several options available in a buy to let insurance policy. For instance, you can get buildings insurance if you want to insure only the buildings in your property. Having this insurance will cover repair or reconstruction costs in the event of floods, fire, malicious damage, and other perils that the policy covers. If the property is on mortgage, make sure you have permission from your lender to rent out the property or else you will not be able to make a claim.

You can also choose to get contents insurance, which covers only your possessions and not your tenant’s. Some of the items that are covered in a landlord’s content insurance are couches, tables, beds, carpets and other furnishings. You can get either a full or a limited contents insurance coverage depending on how furnished the property is.

One important option in buy to let insurance is landlord liability cover. Because you have responsibility to ensure that the property you are renting out is safe, should any dangerous item in your property, such as faulty electrical wiring, injure a tenant, a claim can be made against you.
If you have landlord liability insurance, it will cover the cost of damages you will have to pay including legal fees.

Another buy to let insurance option provides 24-hour emergency assistance that provides specific amount of cover for labor and cost of parts in emergencies such as leaks or electricity problems. This cover is not for general maintenance service. Buy-to-let insurance can also protect you financially when you have tenants facing difficulty in paying the rent. Some policies offer guaranteed rent payments and some will cover your expenses should you need to seek legal help.

In shopping for a buy-to-let insurance, it is best to deal with insurance providers that specialize in this type of insurance. Make sure you select a credible company. Above all, be fully aware of the different insurance policies and understand what each offers.


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