Know your stuff – Landlord Building Insurance
As an aspiring landlord, you should be aware of the two types of insurance that are relevant to the buy to let market; namely landlord building insurance and landlord contents insurance. Both are equally important in their own right and you should attempt to reach some sort of equilibrium when formulating a winning landlord insurance policy. In this article, we attempt to debrief you on the building protection aspect – read on!
Quite simply, this type of insurance does exactly what it says on the tin – it protects the physical shell of your property. Any defect that may befall it or any sort of damage to the aesthetics or functionality of it will be covered by your policy and, on top of this, there may also be an inclusion of fitted items within the four walls of the house itself. This may include fitted kitchens or bathrooms, but you should always double check to make sure whether these do indeed fall under the landlord building insurance cover agreement. Mother Nature answers to no one, so you can never be too careful.
A question that insurers often hear from landlords is “why should landlords plump for this sort of cover – surely regulation house insurance will do the trick?” Well, in short, the answer is no, it won’t. Because you are putting paying customers into the property, their welfare becomes your concern and so that’s where the rules change. Protection from loss of rent, damage to third parties and claims against you in search of compensation are all topics dealt with by this insurance specific to the buy-to-let industry, so the benefits can be, in most cases, very tangible. Further, because it may be your primary revenue stream, it becomes an absolute necessity rather than for a property owner who may only have a more informal agreement.
You may consider further additional bolts to your deal, such as accidental damage cover or, as mentioned, rent protection just in case you are misfortunate enough to come across a defaulting tenant. You may have more than one property that needs insuring, so take that into strong consideration. Being frugal has its benefits but don’t shy away from a group discount if it will benefit you in the long run.
Ultimately, you should be looking at your buy-to-let building insurance deal stretching to protecting you to the tune of an entire rebuild of your property. Unlikely, yes. Impossible, no. And that’s more than enough reason to get protected – now!
