Buy to Let Home Insurance for Landlords

Buy to Let Home Insurance for Landlords

Buy to let home insurance refers to a special type of insurance policy used by landlords. While homeowner’s coverage protects the house and personal contents owned by the landlord, buy to let insurance protects investment cash flow and offers personal liability coverage.

Also known as landlord insurance, buy to let home insurance is not the same as renters or homeowners insurance. Buy to let policies do not provide any type of coverage to tenants or their personal property.

Instead, buy to let provides additional protection when using the home as rental property. Policies can include physical property damage, attorney fees and court costs, and up to one year of lost rental income.

One of the primary disadvantages to being a landlord is tenants defaulting on rent payments. When tenants do not pay their rent or inflict damage to the property, landlords are required to follow proper legal protocol in order to sue for uncollected rent or property damage.

When real estate investors purchase realty to be used for rental property they would be wise to include legal expenses as part of their buy to let policy. Otherwise, they must pay for expenses out of pocket. Even if a judge rules in their favor, landlords may never collect the awarded judgment.

Buy to let insurance policies also include provisions for property damage caused by tenants. In cases where damage is extensive enough to make the house inhabitable, landlord insurance can provide property owners with necessary funds to renovate the home. As long as landlords include property damage within their buy to let policy, they can be compensated for lost rental revenue during the rehabilitation process.

Like most other insurance policies, buy to let insurance allows landlords to choose the type of coverage they desire. Some policies offer minimum protection to cover property damage. Others include property damage and lost rental income. Some landlord insurance policies provide full cash value to cover replacement expenses, while others deduct depreciation from the original cash value.

Prior to placing tenants in rental properties, it is crucial to have appropriate landlord insurance in place. Property owners should spend time comparison shopping buy to let home insurance to determine which offers the best protection. Real estate is a major investment and landlords would be wise to invest in sufficient protection to cover expensive problems that can arise.

At minimum, landlords must have liability insurance coverage. If tenants incur injury due to landlord negligence, tenants can initiate a lawsuit to recover medical expenses and lost wages. Landlords can be held personally responsible for all expenses related to the injury if they do not have appropriate liability insurance. Adding liability coverage to buy to let home insurance will increase premiums, but these costs are minute compared to the cost of tenant lawsuits.

Buy to let home insurance should offer sufficient coverage for repair costs of rental homes damaged by floods, fire, and earthquakes. Landlords should also consider purchasing additional coverage to cover property deterioration, vandalism and acts of terrorism. It is also a smart investment to purchase contents insurance to cover replacement costs of major appliances which are damaged by tenants.

When property owners do not obtain adequate buy to let home insurance they are potentially setting their self up for financial disaster. Many insurance providers offer landlord insurance policies at affordable prices. Don’t place real estate investments at risk. Purchase appropriate buy to let insurance so you can rest assured your property and tenants are properly covered.

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