Why is specialised landlord house insurance necessary?

March 31, 2012

Landlords Insurance

Sometimes some landlords wonder why they need special landlord house insurance and cannot simply use owner-occupier cover.

This may be particularly the case in situations where a landlord has only recently started to let out a property they had previously occupied as their own home or where they have taken in tenants to a part of a property they also occupy themselves as their own place of domicile.

The reason why landlords contents insurance may be essential in such circumstances is simply to do with risk.

Owner-occupier home buildings and contents insurance is written around the insurance provider’s understanding of the typical risks associated with such a property.

However, once you have tenants in a property, insurance providers typically believe that the risk profile changes considerably and this leads to the requirement for specific landlords insurance cover.

There are a number of examples as to why the risks change but perhaps one of those that is easy to illustrate relates to third party public liability cover.

This form of protection may be important to any property owner because anyone may be sued if someone is injured or suffers damage to their property, as a result of your house.

Yet the moment you have tenants in your property, the risks of you being sued for accidents that have arisen because of your bricks and mortar, may increase significantly simply due to the fact that you have third parties on your property for extended periods of time.

That is just one of the reasons why any existing owner-occupier insurance you may have, may cease to be effective or fully effective from the time you start earning rental income from your property.

Whether you are an owner-occupier or a landlord, it might also pay to keep in mind that if your property sits unoccupied for more than a specified period of time (typically 30-45 days) then you may also need unoccupied property insurance if cover is to be maintained.

There is no way around this requirement, as typical owner-occupier insurance does not provide landlord house insurance.  Unless you wish to run the risk of your property being uninsured, it may pay to take landlord insurance seriously and not to presume that this is something that constitutes an alternative to owner-occupier cover.

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