Do you rent out rental properties, or are you a professional landlord? If it is so, you must need a specialized type of insurance known as landlord insurance. Otherwise, when you rent out a property, you are taking severe legal and financial risks that you can not afford. Therefore, before renting out a property, you should look at the risks associated with rental properties so that you can understand the importance of having landlord insurance. This insurance provides cover for damage to your building and contents in the events of fire, flood, storm, theft and vandalism. However, it does not cover your tenant’s contents, so they have to purchase tenant insurance to protect their belongings.

This article will describe some reasons that will help you understand why you should get landlord insurance.

Building Insurance

When you are regularly renting your property and are not a full-time resident, standard home insurance will not provide you with a cover in case of any damage. Thus, if you do not take out proper landlord insurance, you are endangering your financial wellbeing. Your property is a significant investment, so it is essential to protect your biggest asset. Landlord insurance provides you peace of mind and protects your building structure, fittings and fixtures if any disaster occurs. 

Liability Cover

As a landlord, it is your responsibility to provide your tenant with a safe environment. Unfortunately, no matter how careful you or your tenants are, accidents can happen at any time. If any of your tenants get injured at your property, and it turns out to be a fault in the property, you have to pay a compensation claim. Landlord insurance helps you in paying this cost and make sure you are covered in all situations. 

Tenant Default Protection

Loss of rent is one of the worst things that can happen to a landlord. Consider if your tenant loses a job and fails to pay rent or if a disaster hits that leaves your buy-to-let property unlivable. In this time of distress, landlord insurance provides a lifeline. It offers you monthly rental income for a certain time period. 

Malicious Damage

Most landlords are concerned about deliberate or accidental damage while renting out their properties. However, malicious damage instead is costly and more detrimental to your rental income. Malicious damage is damage that is caused by someone who is not your tenant. For example, if someone breaks the window from outside or a guest causes damage to property or fixtures. 

Alternative Accommodation Costs

Although disasters are not very common, they can occur anytime, and it is not in our control. If a disaster like a flood or a storm strikes and leaves your property uninhabitable for your tenants, then you are responsible for covering the cost of alternative accommodation. Landlord insurance helps you by paying the cost of alternative accommodation.

Landlords think that it is very costly to purchase insurance. However, you can find cheap landlord insurance by researching and comparing different insurance providers.