Buy to let home insurance offers additional protection to landlords not available through homeowner’s insurance. While homeowner’s insurance provides liability coverage for the property, buy to let provides coverage for landlord-owned personal property, lost rental income, property damage, and tenant lawsuits.

Buy to let home insurance is also referred to as landlord insurance. This special policy protects cash flow in the event of property damage caused by fire, vandalism or tenant neglect. Landlords can obtain policies that provide additional coverage for legal expenses and up to one year of lost rental income.

Common financial challenges faced by landlords are property damage caused by tenants and rent collection. When tenants default on rent, landlords must adhere to legal protocol set forth in their states’ landlord tenant laws.

Most states require landlords to file legal documents pertaining to past due rent, tenant eviction, or property damage through small claims or civil court. Specific documents must first be sent directly to tenants when attempting to collect rental income. If tenants fail to pay or establish a payment plan, landlords can present their case to a judge.

Landlords are responsible for legal fees and court costs pertaining to rent collection or property damage caused by tenants until restitution is ordered by the judge. Unfortunately, most landlords never recover the full amount even when court-ordered judgments are issued.

Buy to let home insurance includes provisions for legal fees related to tenant neglect and failure to pay. While including this service increases the cost of premiums, the cost of a lawsuit far outweighs the cost of insurance coverage.

Landlords can select from a variety of buy to let property damage coverage. Some policies cover renovation costs when property damage is so extensive the home becomes inhabitable. Some offer compensation for lost income during the renovation process. Landlords should discuss property damage coverage options with their insurance agent.

As with most types of insurance, buy to let policies offer different types of coverage. Some cover only property damage caused by tenants or fire, while others offer coverage for flooding or vandalism. Some landlord insurance policies provide full replacement cost for damaged personal property, while others deduct depreciation costs for the item being replaced.

Sufficient buy to let insurance should be in place before property is rented. At minimum, real estate investors must have liability insurance coverage. If tenants sustain injury on the premises caused by landlord neglect they can file a lawsuit to recover lost wages and medical expenses. Without adequate liability coverage property owners are financially responsible for injury-related expenses.

Landlord insurance should also provide sufficient repair cost coverage for damage caused by flood or fire. Some buy to let policies include coverage for property deterioration and vandalism. Others include replacement cost of personal property owned by landlords, but used by tenants. This is a good choice when investors provide furnished rental and vacation homes.

Real estate investors who do not obtain adequate buy to let home insurance are leaving their self vulnerable for financial disaster. Buy to let insurance is an affordable option and premiums can be included in rental rates to avoid out-of-pocket expenses. Don’t place investment real estate at risk. Invest in buy to let insurance and rest assured knowing tenants and rental properties are properly insured.

Author Bio: Learn more about protecting rental properties with buy to let home insurance from California real estate investor, Simon Volkov. Simon offers numerous real estate investment articles via his website at www.SimonVolkov.com.

Category: Real Estate
Keywords: buy to let home insurance,landlord insurance,real estate investments,buy to let insurance