It is a good investment to own a buy-to-let property, especially now the demand for rental accommodation is tipped to increase in the foreseeable future. However, it doesn’t end with acquiring the property and collecting rent every month, there are other things to consider.
For one, a landlord property insurance is essential for any buy-to-let property-owner. In fact, some financial institutions or lenders will not approve a loan unless you obtain one. If you purchased your property using a mortgage calculator, the following property insurance tips are essential for a hassle-free tenure.
There are different types of landlord insurance policies
There are many insurance products in the market. Before choosing a policy for your let property, do a proper research about the various types available and choose one that covers your priority needs. Don’t be influenced by rates alone as it may cause regrets.
Not all damage is covered
Some insurance providers offer a bundle coverage for certain types of policies, however, note that not everything is covered to avoid misunderstanding. To be able to make claims on certain damages, they often state that it must be “sudden and accidental”.
Decide the amount of coverage you need
The better coverage you have, the less you will have to pay from your savings if an accident occurs. Some mortgage lenders may decide how much you need. Note that the amount of coverage you buy for the property, its contents and belongings will influence the price you pay.
Replacement cost or full cash value?
There are usually two choices to make when you want to insure your home. Will you want a replacement cost or the full cash value if you have to make a claim? The replacement cost is the amount you need to replace or rebuild your home, while cash value is the amount it would take to rebuild the property after depreciation.
Do your research before you buy
It is never a good idea to go with the first insurance provider you see. Study your options and select the most suitable policy. You will save up to hundreds of pounds if you compare alternatives.
Ask agents about concessions
The insurance market is very competitive. Property insurers are always trying to make their policies attractive by offering discounts. Ask your agents about such concessions and take advantage of them.
A policy for every mishap
Whether you own the property or are leasing it, there is always a product available. From furniture damage to fire, break-ins or accident, you can secure a policy of your choice.
Where to buy a policy
The internet is usually the first choice for most insurance buyers because sites like Money Supermarket and Compare the Market allow you to make comparisons. But newspapers, yellow pages and the phone directory are effective for options in your area.
Read your contract carefully
There are cases where people were disappointed by the outcome of their claims. Most of these issues could have been avoided if the property owners studied their contracts carefully. If you are too busy, hire a lawyer to go through it with a fine tooth-comb.
Review the status of your property insurance annually
Contact your insurance agent at least once a year in case you need to review your policy. The property market changes regularly and you will be well covered if your policy suits the current conditions.