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This
is an Insurance article by an independent author and jml
Insurance takes no responsibility for its accuracy or content
Choosing
Buy-To-Let Property Insurance By Don
Suter
Risk
is an area often overlooked by landlords, but failing to protect
the main assets of your business, which often have borrowings
secured against them could lead to ruin.
Landlords
often fail to understand the types of insurance risks that
they are exposed to and are unaware that insurance coverage
for buy-to-let investments is very different to the standard
household insurance policies that cover owner-occupied dwellings.
Therefore,
landlords are advised to seek the services of specialist insurance
companies catering for the buy-to-let market.
Essentially
there are five broad categories of landlords insurance:
- Landlords
buildings insurance
- Landlords
contents insurance
- Emergency
assistance
- Legal
expenses insurance
- Rent
guarantee insurance
Landlords buildings insurance
These
are the core policies and will generally provide coverage
for a number of perils including fire, flooding, burst pipes,
malicious damage and owner's liability.
It
is worth checking the policies of each insurer as the perils
covered may vary. Other issues to be aware of are the amount
of money the insurance company will pay out in the event of
damage occurring, types of tenants (student tenants are perceived
to be higher risk) and consent to let from your mortgage lender,
as failure to gain consent will render your insurance void
in the event of a claim.
Landlords
contents insurance
Many
landlords insurance specialists will offer the option of limited
or full contents insurance.
Limited
contents policies are designed for properties that are let
unfurnished or part furnished. A typical policy would provide
cover of up to £5,000 for items such as curtains, carpets,
white goods and light fixtures. Most policies will also provide
employers and landlords liability cover in relation to these
products.
Liability
cover is important, as the number of personal injury claims
relating to contents has risen at an astonishing rate since
the 1990s, with awards in excess of £100,000 not uncommon.
Full
contents policies are for fully furnished properties or for
limited contents that would cost more than £5,000 to replace.
When applying for full contents insurance, ensure you value
the contents for the cost to replace them, opposed to the
actual value that you think they are worth.
Emergency
assistance
Cover
is provided for general property emergencies, such as failing
electricity supplies and cooking facilities, plumbing problems,
leaking roofs and guttering, and damage to doors and windows.
Typical
policies will provide parts and labour up to a specified cost,
along with a 24-hour call out helpline number.
This
sort of insurance is most suited to landlords who do not live
near their property and have not contracted their managing
agent to provide such a service.
It
should also be noted that these policies only cover emergency
call-outs and are not a general repair service required through
lack of routine maintenance.
Legal
expenses insurance
Problems
can always occur with tenants and in many cases it is a change
of personal circumstances such as job loss, accident or illness
that will affect the tenants ability to pay rent or look after
the property correctly.
Resolving
such situations will usually involve expensive legal costs,
sometimes running into thousands of pounds and legal expenses
insurance is generally recommended.
Rent
guarantee insurance
These
policies guarantee that rent is received regardless of the
tenants personal circumstances or ability to pay. These policies
are most useful for landlords who have a mortgage on the property
and are relying on the rental yield to service the loan. Policies
will often guarantee rental payment for periods of six or
twelve months.
Regulation
It
is always advisable to shop around for insurance and understand
what each policy provides. Always ensure that the insurance
provider is a member of the General Insurance Standards Council
(GISC) and is fully regulated by the Financial Services Authority
(FSA
Please
note that this article is for information and guidance purposes
only. With all financial matters you should seek professional
advice with respect to your own specific circumstances.
Don
Suter is Managing Editor of the UK Property Portal (http://www.ukpropertyportal.co.uk),
an online directory and magazine for UK property sales, rental,
surveyors, mortgages, conveyancing, property insurance, removals,
news, investment and development
Article
Source: http://EzineArticles.com/?expert=Don_Suter
The
information supplied on this page is by a third party and
jml Property Services do not take any responsibility to its
accuracy ©jmlpropertyservices01/06
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