Let's say a tenant causes damage to the property they are renting. Whether deliberate or accidental, you will be covered for any legal costs and be free to evict or take any other action. That is the power of landlord insurance, and it’s just the tip of the iceberg.
In this article, we’ll discuss how landlord’s insurance work. Read on below to learn more.
More about Landlords’ Insurance
If you’re a landlord, you understand how stressful it can be when payday is supposed to come, but it doesn’t. Sure, you can always try to understand a tenant, especially if they’ve done nothing wrong, but what about the unruly tenants?
Landlords need to understand how the insurance works to be sure to avoid any type of confusion, which could result in a claim being refused. Landlords' legal protection covers a wide range of situations. First, it provides a defence against a tenant's breach of contract in cases where the property is repossessed or withheld to pursue compensation.
For example: if the tenant was awarded an illegal eviction and the landlord refused to pay damages and surrender possession of the property, the insurer would then step in and ensure that the landlord was given the necessary legal protection.
Secondly, landlords' legal protection covers situations where repairs or improvements on the property were not undertaken properly. The landlord would call on the insurer to make such repairs.
The Price of Landlords’ Insurance
The insurance price can vary depending on the landlord, the size of the property, the type of policy and other factors. However, landlords can generally expect to receive up to 15% of their annual rent for this insurance.
Why You’ll Need It
If you still have reservations about buying landlords’ insurance for yourself, consider the following:
- Can you cover your mortgage payments if your tenants stopped paying rent?
- If you’re going for legal eviction, it can cost you up to £3,000.
- If a tenant damages the apartment that it cannot be re-let, the landlord may claim 50% of the rent for up to 3 months.
- As a general rule, tenants can receive rent guarantees for up to six months or until they leave the property, whichever comes sooner. Policies widely vary, so your cash flow can be jeopardised.
- Rent guarantee insurance is available for all types of tenants, though most providers will need references that meet specific criteria such as employment and other financial references. If you don't present this, any claim will be rendered invalid.
- Section 8 and Section 21 Notices are designed to secure your possession of the property, but they don't work unless you take further action. If the Tenant does not leave the property, you'll have to apply for a court order for forced eviction.
Landlords’ insurance will protect any landlord from undesirable tenants. What matters is that you choose a policy that will work for your needs, and it’s also recommended that you speak with an expert rather than buying the first insurance that you see.
AP Living London offers comprehensive property management services in Shoreditch, Isle of Dogs, Islington and Southbank. We know how important your property is to you, which is why we provide options on how you can take care of it better. Contact us today to learn more!