Buy to let home insurance guide
Buy
to Let
Currently many potential homeowners are being forced away from the housing ladder due to the banks’ even stricter lending criteria or them wanting a large deposit.
This has led to more people entering the rental market thus allowing landlords the opportunity to raise their rents.
Getting into the buy to let market can be seen as a savvy investment. The popular BBC1 show homes under the hammer has increased the publics interest in renting out their properties but with stories of squatters, tenant/landlord disputes and not being able to attract tenants, some are still a little afraid.
Fortunately with a buy to let home insurance policy (or landlords insurance), a lot of this worry can be taken away.
What does buy to let home insurance cover
A buy to let insurance policy is similar in what it covers to a standard home insurance policy in that it will cover both the buildings structure and its contents.
Additional extras can be purchased to further protect you from some of the perils that being a landlord may bring.
Rental Protection – With rental protection you are protected in the event that a tenant refuses to pay. The insurer will pay out the agreed rental amount to you, especially important if the rental income is used to pay the mortgage on the property.
Legal Expenses – New rules are being passed through to offer more support for landlord who are the victim of squatters. It can cost up to £4,000 going through the legal process to evict squatters which is a high price to pay to remove someone from your property.
What the insurer will look for
When looking for landlord insurance it is important that you compare all your options. Using a comparison site such as MoneySupermarket.com will allow you to find quotes from a number of insurers.
Insurers will work out the premium you pay based on the level of risk. This is the probability of you making a claim. Generally they will look at the following things.
- The type of tenants you have in the property, students, a family, a young couple etc.
- The age of the property. Older properties will be at more of a risk from cracks appearing in the structure.
- The type of property, whether it is a flat, semi-detached etc.
- The location of the property. Different locations could be at a higher risk of floods or burglaries which will obviously increase the premium you pay.
- Do you have a no claims bonus? Remember, the longer you go without making a claim the bigger your discount will be.
- The cost of the building to be rebuilt in the event of total loss
When searching for buy to let insurance it is important to opt for a policy that offers the right level of cover for you and your property. Opting for the cheapest can be a false economy if it leaves you short in the event of a claim.
You cannot prepare for the unexpected but you can insure yourself against them so carefully read through the terms and conditions of any policy and make sure you are happy with the level of cover you have.
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