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If you’re a property investor-slash-landlord, insurance should be very high on your list of priorities. It’s not enough to simply have a generic policy – you need the right policy for your individual circumstances. While your property management company will be able to advise on the basics of what cover you need, you really should consult a professional broker to help craft a bespoke policy that gives you all the things you want, and you aren’t paying for anything you don’t need. If you’re new to being a landlord, once you’ve chosen a property management company in the local area you’ve purchased a house or apartment, ask them for recommendations for reputable insurers - it can be quite daunting when you’re faced with the huge range of insurance companies on offer! Before committing to signing up to a policy, ask if it covers these important aspects. Loss of Rent This is a big one, and it’s important to have appropriate cover if a tenant goes into arrears. The period and amount will, of course, differ from policy to policy, but it offers huge peace of mind so you can still pay your mortgage and other expenses even if you aren’t getting an income from rent. You can also make an inclusion for cover if tenants have to leave the property due to a specific event out of their control - but this must be stated in the policy. Natural Disasters This protects your investment against natural disasters like floods, storms or fire, and will payout for repairs, reconstruction and any contents destroyed or damaged as well. The cost will depend on the sum you choose to insure the property for, so consider this carefully and perhaps discuss it with your property management. Water Damage If you include this in your policy, you’ll be covered against damage to the house or apartment and its contents due to water. This can include storm or rain damage, as well as burst plumbing, leaking appliances and anything else water related. Accidental Damage by Tenants If a tenant damages your property or contents by accident, the cover will pay out up to a predetermined percentage of the sum insured to help with repairs. Remember that if you claim insurance for this, you cannot expect the tenant to contribute. You’ll need reports and photographic evidence, which your property management company should collect for you. Wilful Damage by Tenants As above, but if you add this clause you can be covered for malicious damage or theft by tenants. This kind of cover is highly advisable for your peace of mind and financial security. Fittings and Fixtures This is an excellent addition to work into your policy as it covers you for loss or damage to window coverings (blinds and curtains) and floors. As with most of these “extras”, the amount paid out will be a pre-determined percentage of the sum the building and/or contents are insured for. Appliances and Contents “New for Old” Having this means that any eligible appliances and contents will be covered for their current value and not their “depreciated” value. As mentioned, it’s imperative that you choose your insurance based on the professional advice of a broker and your property management company. Ask questions, shop around for pricing, and make sure your insurers work for you and not vice versa. Author Plate Danny Torres is from Torres Turn Key, a property management company in Rochester NY with more than ten years’ experience providing a holistic service for both domestic and international investors. When it comes to Rochester property management investors can rest assured they are in good hands. The city is one of the most exciting places to invest in both commercial and residential properties and the company brings together a host of experience and specialist knowledge to build long-term relationships and create maximum value and benefit for their customers.
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