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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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