Insurance
There can be wide disparities in terms of scale between landlords, ranging from someone renting out a single property - such as a second home - to property magnates with ever-expanding portfolios of housing and commercial interests. However, regardless of the size of a person’s investment in the property market, they will still need to secure the appropriate insurance to ensure financial protection for that investment. Becoming a landlord means utilising property you own to make money and what this means in insurance terms is that you cannot take out a normal home insurance policy to cover this - even if it is being used for housing purposes. This is because it is classified as a commercial property; thus residential landlord insurance is the type of policy that you would require. This will guarantee you financial protection in the wake of any damage being sustained by the property.There are a number of different circumstances in which landlord building insurance can prove invaluable to the property owner; one of which is if your property is damaged by fire, or by extreme weather conditions such as flooding or storms. In this situation, the property may be uninhabitable for a period of several months and - not only would a residential landlord policy cover you for the cost of repairs to the property - it would also payout the equivalent of what you would be receiving in monthly rent from the property. Thus it will ensure that the owner of the property does not lose out financially in any way, while the damage is repaired.
A different circumstance in which landlord insurance offers vital financial protection is in the event of a breakdown in the relationship between a landlord and his or her tenants. In such a scenario, where the tenants refuse to leave the property or to continue paying rent they owe, the landlord can utilise the legal expenses optional extra offered as part of most landlord insurance policies, to pay for the legal costs accrued through applying for a court eviction.
When it comes to actually applying for landlord insurance, the process is similar to that for home insurance, in that the landlord is required to get an estimate of the cost of rebuilding the property in the event of widespread damage and this estimate is one of the major factors (along with location) used to calculate the premium. The actual criteria for calculation vary depending on the company. Furthermore, even if a landlord owns several different properties, they can secure a single policy to cover all of them.
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