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What is home insurance?
Home insurance is a type of insurance that financially protects your property against damage and loss. If, for example, your property was damaged due to a burst pipe, then, instead of footing the bill yourself, it would be paid by your home insurance provider. However, there are many variables when it comes to home insurance, which is best to be thought of as an umbrella term that covers all things property protection.
What types of damage are often included?
- Fire, explosion, storms, floods, earthquakes
- Theft, attempted theft and vandalism
- Frozen and burst pipes
- Fallen trees, lampposts, aerials or satellite dishes
- Vehicle or aircraft collisions
You can also add on extras for:
- Flooding or subsidence if you live in a high risk area
- Accidental damage to your home
- Alternative accommodation if you have to move out of your home after you’ve made a claim
- Damage to boundary walls, fences, gates, driveways and swimming pools
- Damage to underground pipes, cables, gas and electricity supplies
- Glass in windows, doors, conservatories and skylights
- Liability cover if someone else’s property is also damaged
- Legal expenses cover
If you’re about to dip your toes into the property market as a landlord, it’s imperative that you protect your investments in the most effective manner. Landlord insurance is naturally one of the top items on your checklist.
Here’s a detailed overview of what you need to know about the processes involved:
What types of landlord insurance packages are available?
There are several types of landlord insurance that you may wish to include in the overall insurance package for your investment properties. The most important ones are:
- Landlords’ building insurance: to protect the property by covering the cost of repairing or rebuilding it in the event of damage caused by fires, natural disasters, or flooding.
- Landlords’ contents insurance: to protect the furniture and furnishings against tenant damage, theft, and other problems. This is an optional extra.
- Property owners’ liability insurance: to protect you against claims made by tenants regarding injuries sustained in the rental property, perhaps from trips and falls.
- Tenant default cover: to protect the mortgage payments should a tenant decide to leave and default on their payments. It can cover up to £2,500 per month for a period of eight months.
- Legal expenses insurance: to protect you by covering the incurred legal expenses in relation to the rental property, such as chasing tenants for damages. There is no one right or wrong solution as to which items should be added, but you should always read the terms and understand the maximum pay-outs
How can I get the best landlords insurance package?
Given that the whole purpose of your landlord activities are to generate profits, finding the best value for money (without sacrificing the necessary level of protection) is crucial for success. The cost of your premium will be influenced by many factors such as building type, location, size, and the tenants themselves.
Whether taking the DIY approach or using an expert, always run comparisons to find various quotes. Before making a commitment, be sure to read the full details to check you aren’t paying for unnecessary services.