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This
is an Insurance article by an independent author and jml
Insurance takes no responsibility for its accuracy or content
Cutting
The Cost Of Landlord's Insurance By Adam
Singleton
Apart
from agency fees and mortgage costs, the principal overheads
associated with a property portfolio relate to maintenance
and landlords insurance. If this sounds like we are mixing
together two separate topics, then you might like to consider
that maintaining your property in a good state of repair is
an important factor in keeping down the costs of landlords
insurance.
It
is not that landlords' insurance premiums are directly related
to property condition; however there is an indirect link that
can make considerable difference to you. This is because the
total cost of insurance is not just the premium, but also
how a claim is settled. Failing to keep your property well
looked after might not directly increase your landlord insurance
premiums, but insurers may not wish to cover a poorly maintained
property at all. And when it comes to paying a claim, the
insurance company will look carefully at the state of the
property to ensure that there is no degree of "betterment"
in the settlement.
In
other words, if premises already needed significant repairs
before they suffered fire damage, the insurance company, when
considering how much it will pay out for your fire claim,
would take into account the money you would have had to spend
on making them good in any event.
It
is no good thinking that the building will be so badly damaged
that the insurance company will never know - the majority
of claims are not for total loss but for partial damage so
there is likely to be plenty of evidence about. And even if
the premises are totally destroyed, the underwriters may well
look at the balance of your portfolio for an indication of
how good the level of maintenance was.
If
this sounds a bit too much like "big brother" for your taste,
it is worth remembering that the money insurance companies
pay out in claims comes from your landlords insurance premiums,
so you do not want them paying out more than necessary to
other people, or you will end up paying for their largesse.
Of
course, it is important to ensure that you have the right
landlord insurance in the first place. For residential buy-to-let
properties, a standard home insurance policy will be unsuitable,
partly because there is likely to be a condition that you
are occupying the premises yourself, but also because some
of the covers you will require are likely to be missing.
For
example, only a special landlord's insurance policy is likely
to include insurance for loss of rent and to cover the cost
of re-housing a tenant following damage (this is typically
up to 30% of the buildings sum insured).
Similarly,
most conventional home insurance policies will not cover extended
periods of unoccupancy between lets, whereas a specialist
landlord's insurance policy will be more flexible, albeit
subject to some sensible precautions being taken.
Specialist
landlord's insurance policies are also likely to be more accommodating
when it comes to property construction; imposing additional
charges only on exceptional properties such as those constructed
substantially from timber or with a thatched roof. They will
also include employers' liability insurance, which is essential
if you use direct labour for cleaning, repairs and so on.
Many
of the landlords associations provide insurance schemes designed
especially for buy to let investors and offering enhanced
benefits and reduced costs for members. For many landlords,
it is worthwhile joining one of these associations simply
to take advantage of the competitively priced insurance deals.
http://www.alanboswell.com/landlords_insurance/index.aspx
Article
Source: http://EzineArticles.com/?expert=Adam_Singleton
http://EzineArticles.com/?Cutting-The-Cost-Of-Landlords-Insurance&id=918976
The
information supplied on this page is by a third party and
jml Property Services do not take any responsibility to its
accuracy ©jmlpropertyservices11/08
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