Property Landlord advice: The Importance of Landlord Insurance.

By Steve Roulstone

Firstly, to explain the title, this is not House Insurance, as being advertised as Landlord Insurance by a well known Company at the moment on TV. Proper Landlord Insurance is about Insuring against loss of Rent and Legal expenses (R&L) should a Tenant fail to pay and need evicting.

Is Insurance for Rent and Legal Expenses important?

When you consider that annual policies that cover the period that Courts could take to evict Tenants from a property are available for less than £100 in today’s market, I think every Landlord should think so and I speak as a Landlord myself. When you consider that any Tenant could find themselves redundant, then taking out a policy for less than 2% of a year’s rent should not be a difficult decision.

Our duty of service to advice.

We must always ensure that as Letting Agents we stay inside the FSA regulations surrounding the selling of Insurance policies and unless we are qualified then our role is to advice Landlords that the policy is available and then let the Insurance Company sell the attributes of R&L Policies to our Landlords.

Should be common practise.

I have just found an advice line for Landlords statingthat Landlords should be careful how they select Tenants in case they cannot afford to pay the rent. No problem at face value, but if they employ the services of an agent, which they do not advice, by using professional referencing we can both ensure the Tenant is acceptable at the start of the Tenancy and because through this referencing R&L Insurance will automatically be available, providing of course the Property is fully managed, then Landlords can ensure against such problems during the Tenancy.

Managing the situation.

As I have reported in a recent Blog, Local Council Housing departments do NOT offer help and only act to delay the process of providing the Tenant with accommodation. So by having the correct Policy in place, Rent and Legal expenses which can be expensive on their own, will be covered.

Hidden advantages.

There is a valuable side effect that should not be ignored: By knowing you will not lose any rent, you can at least work with your Tenant and assist him with the Housing department. Such acceptance and assistance can only receive appreciation from the Tenant – after all, they will not want to be in this position either and human nature should ensure that the property is at least looked after during the process.