The Dangers of Not Having Landlord Insurance

Do you really need landlord insurance? In short, yes. Without landlord insurance, you put yourself at great risk as far as liability and repair costs are concerned.

Many landlords are put off by the idea of having to invest in yet another insurance policy. After all, your homeowner’s insurance should offer the cover you need, right? Wrong. Homeowner insurance will not cover you if you tenants living on your property. If you’re letting your property to tenants and you don’t have landlord insurance, you need to be aware of the dangers of not having this vital protection.

Liability Concerns

If a tenant injures themselves because of something dangerous on the property, you may be held liable for damages. If you don’t have landlord insurance, you will be paying those damages out of your own pocket. A standard policy will include this protection, and it can mean the difference between settling and going bankrupt.

You Will Be Liable for Contents Damage

If you’re like most landlords, you probably provide your tenants with a few essential items in the home, such as appliances or light fixtures. Many landlords offer fully furnished properties. While you may care about the upkeep of these items, your tenants may not share the same sentiment.

What would happen if your tenant destroyed a sofa or stained the carpeting in the home? You, as the landlord, would be responsible for replacing or repairing those items yourself. Even if your property is unfurnished, the cost of replacing or repairing these items can be devastating. Landlord insurance will cover any contents in the home that belong to you.

Your Insurance Company May Deny Your Claim

If your property suffers damage from a flood, fire or vandalism, your homeowner insurance may not cover the cost of repair or rebuilding.

When the insurance company first issues you the policy, it is with the understanding that you will be occupying the dwelling. Because you are letting the property to tenants and the insurance company was unaware of this, they may deny your claim. In fact, there’s a good chance that they will deny your claim. If your claim is denied, you will be responsible for paying for repairs or rebuilding.

What it ultimately comes down to is peace of mind, and that’s exactly what landlord insurance provides. Although it comes at an additional cost, you can rest assured that your property is protected against damages and your finances are protected against liability claims.

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Landlords: What to Do if a Flood Happens

One of the biggest concerns that landlords have is flood damage. Even if you have landlord insurance, the effects of even minor flood damage can be devastating to your property. Navigating through the process of making an insurance claim and dealing with tenants can be overwhelming.

Who is Responsible for Flood Damage?

As a landlord, you are responsible for ensuring that your property is safe and well-maintained. While minor cosmetic blemishes can be overlooked, damages that affect the habitability of the property must be addressed immediately.

Flood damage certainly qualifies as something that affects the habitability of the property. Water that soaks into the carpeting or walls can lead to mould development or compromise the structure of the building. There’s also the potential that the flood waters may have damaged electrical or gas supplies. Ultimately, it is your responsibility as the landlord to repair the flood damage.

In the case of minor flood damage, your tenants may not need to vacate the property. In this case, repairs are typically completed in just a few days or a week. Moderate flood damage may require your tenants to vacate the property for a few weeks, but you would not be responsible for finding alternative accommodation. In the case of serious flood damage, you may need to seek out alternative accommodation for your tenants for several months. Depending on your tenancy agreement, the tenancy may be terminated under these circumstances.

Does Landlord Insurance Cover Flood Damage?

If your landlord insurance includes building insurance, your property should be covered in the event of a flood. If your policy also includes contents cover, any items in the home that belong to you should be covered as well. These are items that you supply your tenant with; not their belongings. It’s up to the tenant to ensure that they have their renter’s insurance policy.

The insurance company may wish to assess the damage before any repairs can be made. Ask your tenants to be patient through this process. Depending on the severity of the damage, it may take several weeks or months for the repairs to be completed.

Safety Concerns

If your property is located in a flood area, you may want to consider providing your tenants with emergency supplies should a flood occur. This includes sandbags, airbricks and flood boards. These items may be an added expense, but they can prevent costly and severe flood damage.

Landlord Insurance: How to Make a Claim with Any Company

New landlords often get a landlord insurance quote and obtain a policy, but they never expect to actually have to make a claim. While many insurance companies strive to make the process as simple as possible, it can often be difficult to know how to make a claim and to know when to actually make a claim.

Making the Claim

A simple call is usually all that is needed to make a claim. On your policy, you will find the number of the insurer’s claim center, or you can simply call the main branch to file a claim.

Most insurers will also have a section on their website where you can file a claim virtually. You may need to login to the website itself at this point, but it is the most convenient way of making a claim, and you will not spend a second on hold with a representative.

Ensure a Claim is Valid

Before making a claim, it is best to ensure that there is a valid claim to be made. While you may think that you have a valid reason to make a claim, it is always best to review your policy so that you know if you have the proper cover.

This information can be found in your original policy documentation and often online when you sign into the company’s website.

Making an invalid claim will only increase the time it takes to have your property repaired.

Steps to Prepare Yourself

Claims can be a difficult time, and as a landlord, it is your responsibility to act swiftly and with diligence. The following helpful tips will ensure that when you make a claim, you have followed all of the correct procedures.

  • Always make a claim quickly. If you do not make a claim within 30 days, you may forfeit your right to make a claim altogether.
  • A claim must be written in great detail and any evidence should be provided to the insurer.
  • If damage has occurred, it is your responsibility to do all that you can to reduce further damage from occurring as well as reduce the risk of injuries.
  • Repairs that are not made with the consent of the insurer will not be covered.
  • If this is a crime-related claim, you must contact the police as well as the insurance company.

The more swiftly that you act, the easier it will be to file a landlord insurance claim. You will have an easier time obtaining evidence, reducing damages and ultimately having your claim approved.

How to Save Money on Your Landlord Insurance Policy

No landlord wants to pay more for a landlord insurance policy than is absolutely necessary. When you have to maintain the lowest premiums possible, there are a variety of ways that can save you money now and in the future. Let’s take a look at some of the ways landlords have been able to keep premiums low and oftentimes lower them even further.

1. Get a Recent Valuation

Remember when the insurance agent asked you how much cover you need? If you simply said the first number that you felt was accurate or worse, you chose the highest possible cover, you are likely overpaying greatly.

The value of your building needs to be assessed so you know how much it is worth. Furthermore, you will need to know the rebuild price, not just the value of the property, to ensure you have the appropriate amount of cover.

You can lower your cover amount to just above the value of your property so that you maintain adequate cover, but you are not paying for more than your property is even worth.

2. Contents Cover

Is your property unfurnished? If you have contents cover and you do not let a furnished property, you may want to rethink your policy. Contents cover is going to only cover minimal damages when there is no furniture present. Blinds and carpeting are the two items you will need to worry about most with contents cover.

If you need to replace your carpeting in the future or you have a different flooring type, you can often get rid of contents cover to save a lot of money on landlord insurance.

3. Combine Properties

Landlords that have multiple properties can often include them all into one major policy. This policy would provide cover for all of a landlord’s properties and do so at a much cheaper cost. Check with your insurer to see if they will allow you to add more than one property to your policy.

4. Making Claims

Did you know that making claims can raise your future premium with an insurer? Unfortunately, landlord insurance companies will want you to make as little claims as possible. If the excess for a claim will be minimal, you should really think about paying the difference and not making a claim.

The difference between 50 to 100 pounds is meager and will often keep future policy renewals from rising. If the damage or repair costs are relatively small, you may want to drop the claim.

Top 3 Landlord Insurance Tips

Landlords must be prepared to make a claim when the unthinkable occurs. While there are a variety of claims that can be made, the following 3 landlord insurance tips will help every landlord prepare for having tenants and reduce the most common claims seen.

Reduce Water Claims

Water damage and problems are among the top claims seen in every insurance agency. In fact, water is so prevalent that landlords are advised to:

  • Inspect pipes routinely for leaks or damage
  • Teach tenants how to shut off the main water supply in case of emergency
  • Alert tenants of the proper pipe safety tips in frigid temperatures

The more diligence you have, the less water issues will arise. If your let furnished property, you may also want to secure contents cover. This is not only good for furniture, but carpets and curtains as well.

Vet Your Tenants

This goes without saying, but you must vet your tenants very well. This will allow you to be able to reduce the chances of your property’s contents becoming damaged or broken. Tenants that have young children or like to throw big parties will often leave carpets stained, accidently break televisions or ruin other furnishings.

While accidents do happen, you want to keep them at a minimum. If possible, hardwood flooring will ensure that stains are less of an issue, but this is not feasible for all properties.

Knowing the personality of your tenants will lower the chances of “accidents” occurring.

Furthermore, malicious damage claims, which are high on the list, will be mitigated as well. To ensure that malicious damages are kept to a minimum, you can purchase reinforced windows and locks for all property gates. A security system can also be utilized, but this is not necessary in most cases.

Storm Damage

Storm damage is another major issue seen in the landlord insurance industry. All too often landlords forget that storms take a toll on their property’s roof and exterior.

As a landlord, you should regularly inspect and repair any damage to your roof as well as your gutters. This diligence will reduce the chances of further damage occurring due to a repair that has been neglected.

Landlord insurance is a necessity, but it is up to the landlord to reduce any damages that occur to his or her property. When you are letting to new tenants or you simply want to ensure your property is always in great condition, these tips will definitely need to be utilized.