What is Landlord’s Insurance and Should You Get It?
If you’ve recently taken the plunge into the investment property market, you are likely to be looking into landlord’s insurance. So what exactly is landlord’s insurance? What does it cover, and is it something you should consider getting?
What is landlord’s insurance?
Owning a rental property can be a scary thing. You may have invested your entire savings into a house or unit, and you’re trusting others to look after is as they would their own. If the unthinkable happens, though, and your property is damaged either maliciously or through accident, or something happens to your income, you need to make sure you’re covered – and that’s where landlord’s insurance comes in.
What does landlord’s insurance cover?
Insurance for landlords covers things such as damage to the property itself, or the contents, if the tenants fail to pay, and if you lose income as a result of any of the aforementioned circumstances. It’s insurance in the truest sense of the word – helping you avoid the pitfalls of investing in the property market.
Of course, there are things that need to be taken into account. The cost of the insurance itself needs to be considered. Shop around and find a price that suits your budget, because even though it can be claimed back on tax, you need to come up with the money upfront.
Important questions you should be asking:
- What does the landlord’s insurance cover?
- Are there any eventualities you can rule out to decrease the cost?
- Are there any special circumstances you need to ensure you’re covered for, which might increase the premium?
- How much is the excess?
- Can you increase the excess to lower the cost of the premiums?
Ask these questions, and don’t be afraid to compare prices, even with the people you’re speaking to. Enquire about the technicalities – are the fees for sheriffs included, if you need to evict? New locks? Liability? Look at the ways you can make a claim. Is it entirely online? Can you speak with an operator at any time of the day or night?
The bottom line is that if you own a rental property, then you need landlord’s insurance. If you can’t afford it, then perhaps you should rethink your investment strategy. Insurance is designed specifically to cover you in the event of an unfortunate situation. If the motor in a tenant’s washing machine causes an electrical fire, can you come up with the money for repairs and cover your repayments while the tenant pursues you for the costs of their losses? Landlord’s insurance is an essential part of your investment property expenses, and it’s certainly something you should get!