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Landlord Insurance or Home Insurance

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By : kath wong    99 or more times read
Landlord insurance may seem to be the same as home insurance but there are important differences that make home insurance the inappropriate choice of cover for a landlord with any buy-to-let property.

Insurers see a buy-to-let property as a greater risk than that of an owner-occupied household. Tenants are often more short-term than owners and have a smaller investment in the welfare of the property. This factor is accounted for in the insurance cover as the property may be more likely to be damaged either accidentally or maliciously by the tenant or third parties.

When a problem does occur with a property such as a minor leak or breakage, insurers take the view that a homeowner will be more likely to fix the problem straight away. Often in the case of a buy-to-let property, the tenants feel the problem is for their landlord to sort out meaning a small problem could turn into a big one and the insurers end up paying out for a large claim which could have been avoided. A landlordís insurance policy will take these factors into account to provide coverage for these types of situations.

There are many different types of tenants that may live in any buy-to-let property including professionals, students, DSS and asylum seekers. They are all viewed to be different in terms of the risks they present to the property. Professionals are viewed as the lowest risk tenants as they are working and less likely to break the terms of the contract. In comparison a home insurance policy is designed for the home owner and it is assumed they will be living in the property full time with their family and not tenants. Home owners have a high investment into the welfare of their property so it is viewed as lower risk by the insurers. A landlordís insurance policy will account for the potential risks of a particular type of tenant.

Landlords insurance provides cover essential to a buy-to-let property that a home insurance policy cannot provide. For example, malicious damage can be covered in a landlordís insurance policy but you cannot cover a property that you live in yourself from malicious damage. This is true for many aspects of a landlordís insurance policy which cannot be covered by home insurance including loss of rent cover, unoccupancy cover and certain liability covers.

Therefore any property that is rented out to tenants will need to be covered by a landlord insurance policy. If the insurance is not appropriate to the property there is a very big risk of the insurance company refusing to pay any claim being made leaving the landlord out of pocket. This is why there are many specialist buy-to-let insurance companies who can tailor their products specifically to the needs of landlords.
For more information please visit Rentguard Insurance.

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