Property Owners Insurance

Who needs property owners insurance and why should they take it?

Property owners insurance covers losses that you may incur relating to your rental property. There are two main types of property owner policies – Residential and Commercial and for each, the property in question may be a single property, a group of properties together (such as flats or apartments), or various properties in various locations (known as a property portfolio).

Having your property portfolio insured under one policy can make the administration of the insurance easier and more cost-effective.

Whilst it is not a legal necessity to have landlords insurance, if the property is mortgaged your lender will usually make it a requirement to have suitable insurance in place. If you have any employees who deal with your rental properties it is a legal requirement to have Employers Liability cover and this can be added to most policies.

Each property owner's policy can be tailored to your needs and cover can vary depending on your requirements. The most basic aspect of a policy is for the buildings which will cover rebuild or repair to the structure of the building however you may also wish to include some of the following;

• Property owners liability – covers the cost of damage or claims made against you as a result of an accident or injury sustained on your property
• Alternative accommodation – covers the cost to re-house your tenants if the property is uninhabitable due to damage
• Contents cover – for repair or replacement of damaged contents if the property is let furnished for example
• Loss of rent – will pay our if your property is uninhabitable due to damage
• Default insurance – can cover you if your tenant fails to pay the rent for 2 months or more (you will normally be expected to have performed credit checks and obtained rent references at the start of the tenancy)
• Legal expenses – covers legal costs such as fees for dealing with evictions, or court costs for unpaid rent.
• Employers Liability – covers compensation claims by employees for injuries sustained whilst working for you

Some policies are also specifically designed for unoccupied properties that may be awaiting sale or renovation, you can also choose reduced cover or full cover on these policies. You may have certain obligations (such as visiting the property frequently) where a property is unoccupied.

A rental property is likely to be one of your biggest investments and with the right cover in place you can have peace of mind that your investment is safe. Be sure to speak to a professional broker to obtain the right cover for you.

Some policies are also specifically designed for unoccupied properties that may be awaiting sale or renovation, you can also choose reduced cover or full cover on these policies. You may have certain obligations (such as visiting the property frequently) where a property is unoccupied.

A rental property is likely to be one of your biggest investments and with the right cover in place you can have peace of mind that your investment is safe. Be sure to speak to a professional broker to obtain the right cover for you.