Landlord Insurance Specialists
Cover taken out by landlords on property they are renting is a specialised form of house insurance. A key feature of these policies is that they are designed primarily to protect the landlord financially in case the property is unable to produce the intended and desired income.
This being the case landlord insurance covers things like damage to the property in order to cover the cost of repairs (more about this in a moment). Damaged property may well hamper the capacity of the property to produce an income. It also may kick in if there is ever a legal issue with a tenant. The cover can also help recoup any legal fees that might be incurred. Specific details of the policy would determine if these are covered.
Something to pay close attention to on a policy is the fact that some policies are very specific as to whether the coverage is exclusively for exterior damage or may also cover interior damage to the structure.
Essentially, two types of cover are available. One is referred to as an actual cash value policy. This coverage, as the name implies, is concerned for the actual cash value of the property that is being covered. That is, what is it worth right now. It doesn’t matter what it may have cost brand new. Depreciation is figured in and the money that is provided by the provider is only for what the property is worth right now. This is the cheaper route to go when considered from a month-to-month premium vantage point.
The other type of cover is replacement value. This provides money to actually replace the insured property. Even though it may have depreciated in value over time, whatever it costs to replace it now is the amount provided by the insurer. This type of coverage means a higher monthly premium, but it also means that it pays out more in case of a claim. It should be noted that the repair or replacement has to have been made before any pay out is made. In other words, you won’t be able to collect money on a loss and not do the repair or replacement.
As always, people are on the look out for potential savings. Landlords are no different. When dealing with insurance, one of the best ways to get savings is to do some comparison shopping. Don’t just go with the first quote you get. Be sure to acquire at least three quotes. More often than not, cheaper cover is available.
Another means of reducing monthly outlay is to raise your excess. The excess is the amount of money you will pay upfront before the policy will kick in with its money. When you set a higher excess, the lower your monthly premium will be. Just be sure you don’t put yourself in a bind and not have the cash on hand to cover your excess. But if you do, a higher excess is a great way to lower you monthly costs.