One question I get asked a lot is why a landlord cannot just have a normal household insurance for their rented property and in this article I am going to try and explain exactly why there is a whole different type of insurance for something that, to most people, seems just the same as a household situation.
The first thing and probably the most important of the reasons that I will talk about is the factor of risk and even in this factor there is a few different sub contexts that insurers will talk about. For example they risk that the property itself is in from the tenants is something that insurers will have to factor in to the insurance cover as they see that the property could have more damage done to it or allowed to be done to it if it is a rented property as opposed to the owner themselves living in their.
The second factor within the risk of the property is on the basis of claims and insurers tend to feel that with a normal household where the owner of the property is living in the property themselves that all minor leaks and stuff that could eventually lead to claims if left to go on long enough are dealt with quicker than if the property is rented out as the tenants may feel that it is their landlords that should sort the problem out and if nothing is done then the small problems could in turn lead to major leaks and things of that nature which a Landlords Insurance Policy would have to take in to account.
A landlord’s policy will also take in to account the different type of tenants that you could rent your policy out to, such as Professionals, DSS tenants, Students and even Asylum Seekers. Obviously they are rated differently with Professionals seen as the lowest risk as they are working people and less likely to do anything against the terms of the lease agreement. Whereas a home insurance policy is designed for the owner of the property and is therefore rated on the basis that they live in the property full time and no outside tenants will be in the property.
The other major talking point is the aspect that if a property is tenanted out then it is seen that the property itself is in a larger risk as the tenants could maliciously damage the property and this is something that you can get cover for in some types of Landlords Insurance, obviously this is not covered in a normal Home Insurance Policy as you can not cover a property that you live in yourself from if you maliciously damage it.
I hope that this helps you to find out what exactly you need and some of the differences between the 2 policies and remember if you rent the property out the cover you need is in a Landlords Insurance Policy not a Home Insurance Policy.