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Insurance (buildings & contents)

You need buildings insurance to cover the risk of damage to the structure and permanent fixtures and fittings of a building, for example as a result of fire. Tenants are usually responsible for providing their own contents insurance to cover their personal belongings, but you should take out contents insurance to cover loss or damage to household goods that you have supplied, e.g. cooker, carpets, curtains etc. Note that it is a matter for the tenants whether or not to take out insurance for their own property: you cannot require them to do this.

Insurance for rented property is usually more expensive than for owner-occupied accommodation; furthermore insurance aimed at owner-occupiers will not be suitable for rented property. The Association of British Insurers produces guidance for owners which explains how insurers  assess risks and what you can do to secure cover. If you do not declare to your insurance company that a property is occupied by tenants (instead of being owner-occupied), this is likely to invalidate the insurance, and any claim you make will either be refused or will be reduced. Remember that insurance cover, like your mortgage, may come with conditions attached governing the type of tenant that you let to.

There are special policies for landlords that provide cover for loss of rental income, and the cost of temporary accommodation where a property is made uninhabitable as a result of one of the causes insured against. The policy should also include a Public Liabilty element. The insurance market is extremely competitive and it is worth shopping around to find the best value for money. Landlordsí organisations often offer lower cost insurance to members.

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