Landlords Contents Insurance – The Reasoning behind the Investment

Landlords invest a lot of money into their properties going as far as getting them financed by banks or mortgage companies. The investment is made with an intention to generate an income from the property by letting it out to tenants. Bearing in mind that their financers would demand insurance on the property they would also have got building insurance. However things come to a head when they are asked to invest more money in the form of landlords contents insurance. Another policy, what for? Why would they want to invest more money in another insurance policy when the building was already insured? Let us look at the reasoning behind the investment.

We have already mentioned that landlords would have invested a lot of money into the property and the building insurance as well. Now they are being asked to invest more in landlords contents insurance. The reasoning behind this request is simple. Landlords look for tenants to occupy their buildings and generate an income from the rent they collect. In order to make their building more appealing and get a good return in investment, they invest money in accessories like carpets, curtains, modular kitchens etc. Some landlords are even known to include appliances such as washing machines and dryers in order to increase the appeal of their property. These accessories are classified as contents of the landlord and are not covered under the policy issued for the building. Therefore they are requested to buy more protection to cover for these items as well.

It is easy for landlords to think they do not need landlords contents insurance and it will be the responsibility of their tenant to buy the policy. However insurance companies do not seem to think in the same manner. They classify property of the landlord differently than that of the tenant. In such conditions if there were to be a fire or any incident that caused damage to the property and the contents inside, the landlord would only be eligible for compensation on the building. On the other hand, if they had purchased landlords contents insurance, they would be eligible for compensation not just for the building but also for the contents inside, which belonged to them.

It must also be understood that the landlord is not responsible for any losses incurred by the tenant in the event of any incidents. Tenants are required to have a policy of their own if they intend to claim for damages to their belongings. The insurance company of the landlord will refuse to consider any claim that includes contents of the tenants.

Having spoken about the reasoning behind the investment in landlords contents insurance, let us now look at how they can apply for such a policy. They could very well call the current insurer of their building and inquire whether they can include their contents in the same policy. In most cases providers of building insurance will also have the option available with the. However if they do not or for any reason cannot accommodate the request, a new application for such a policy can be made with another provider. A list of all contents in the building will have to be provided to the insurer along with the value attached to such contents. Insurance companies will want to verify the contents and their value before any policy is issued to the landlord. Some insurance companies impose restrictions on the value of contents that can be insured by the landlord. This can easily be verified by going through the policy document or by reading the terms and conditions of such policies. It will sound pretty easy to ignore the subject of landlords contents insurance but it must be understood that this is a cover for the large investment made by the landlord.

If you enjoyed reading this hub, you may want to check out my other hubs on similar topics such as guaranteed car finance and finding an affordable van insurance quote.