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Are you a first time landlord?

It might surprise you to know that in the UK a large proportion of landlords are running unnecessary risks because they haven't taken out the right sort of tenants insurance on their property. Whether you're just letting out one unit or you're managing a portfolio of properties, it is your responsibility to make sure you're properly covered by tenants insurance. Otherwise, it's only going to be a matter of time before something happens which will make you regret your failure to put the proper precautions in place.

 

There are several strands to the types of tenants insurance you can take out as a landlord. No doubt you already have building insurance, indeed this will be a legal requirement if you hold a mortgage on your property. But, did you know that you need to contact your insurer and specify that your property is being let out to tenants? If you don't do this, it's highly likely that your insurance policy will be invalid and the company will not pay out in the event of a subsequent claim. To make this absolutely clear - it's your responsibility to tell the insurance company that the property is occupied by tenants and it won't be any use claiming you didn't realise this. There are a number of companies which specialise in organising tenants insurance for landlords and it will benefit you to do a comparison of what's on offer. If you're managing several properties you may be offered a special lower rate by some companies.

 

Specialised tenants insurance for landlords can also cover your property when it's unoccupied. If tenants leave and there is a delay in finding new ones, or you need to carry out repairs and redecoration in the property in between tenancies, it will be vulnerable with no-one living there. You can arrange a policy to cover you during this period of non-occupancy and you may also choose to insure against loss of rent in the interim and the cost of re-letting the property.

 

Your tenants are themselves responsible for taking out insurance to cover theft, loss or damage to any of their personal possessions within your property, but as landlord you will need to insure the contents that belong to you. Whether you are letting the property fully furnished, or you have only provided white goods, curtains and carpets, you will want to insure against these being damaged. Also, you need to cover yourself against your tenants having an accident at the property which could be attributed to something that's your responsibility. They may sustain an injury from a faulty appliance such as a cooker or heater, or trip on a loose carpet. These things happen and tenants may take steps to obtain compensation from their landlord.

 

In the bleak economic climate currently facing the UK, the prospect of tenants defaulting on the rent is never going to be far from a landlord's mind. You may have taken all the necessary steps to check out their references and good financial standing before accepting them as tenants, but redundancy and other money problems can hit anyone at any time and you may find yourself in the situation where the rent hasn't been paid. If you have taken out cover for this, the insurance company will recompense you and your income will be safeguarded. In the event that it becomes necessary to evict your tenants, the legal expenses option for your policy will cover any expenses incurred.

 

A further option to include in your tenants insurance is cover for calling out the relevant tradesman to carry out repairs in an emergency. You may have regular trusted people you like to use for routine repairs and checks on your property, but problems with gas, electricity and water always seem to happen out of hours and the costs of getting someone in quickly to deal with this can be very high. Emergency repair cover will give you the peace of mind that comes with knowing this sort of disaster will be dealt with and paid for by your landlord's tenants insurance.

 

It may seem a lot to think about, but a little time spent now in making sure you have the right tenants insurance cover for your rental property is going to save you a great deal of potential hassle and expense in the future.

 

Richard Anthony Oakes, Sharon Linda Oakes & Ashley Burton trading as Oakes Insurance Consultants are
authorised and regulated by the Financial Services Authority. Number 307170

Registered office: Oakes House, Derby Road, Long Eaton, Nottingham NG10 1PD