As a millennial, I understand that getting onto the property ladder and owning your ‘own home’ can seem like a distant dream that will never be achieved. I understand that we live under the median living wage and work day and night just to be able to afford our rent and keep a shelter over our heads, just as I understand that the concept of becoming ‘landowners’ or renting out properties to third parties, whether that be friends, students or family can seem unattainable. But for some of us, there will come a time where we will have our own homes, and consider renting out rooms to save money or even set up ‘air bnb’ accounts to help us earn when we are abroad, on a staycation or anything else, helping us save for a brighter and better future. But what does the concept of owning our own home or renting out properties have to do with ‘commercial property insurance‘ I hear you ask? Well put simply, when you make the decision to become a landlord- whether that be on your own or with a partner- you need to understand your rights as a landlord and look into protection for yourself as a property owner who is letting out to 3rd parties for commercial use. After all you will have a rental agreement with your tenant that can ‘make or break’ your ‘letting’ or ‘sub-letting’ business, so financially as well as commercially, when you decide that you would like to become a landlord, you should not make your decision lightly.
Part of knowing your rights as a landlord stems around understanding why you should invest in commercial property insurance; while your home being let out to complete strangers creates a ‘vetting process’ in itself, what you also have to bear in mind is the unexpected costs of damages and repairs that can occur when your tenant (s) are living in the accommodation which can be both ‘accidental’ and on ‘purpose’. Whether that be the boiler breaking down or the shower running cold, or even something more large scale like a ‘beam in one of the rooms collapsing’ commercial property insurance allows you to research into your rights as a landlord and establish how you should be insured for the full cost of what it would be to rebuild your property should it be destroyed, as well as existing to cover the costs for repairing damage or rebuilding. Which is why I must make it clear to you that it is also important to not ‘under insure’ your property and to value it at its true cost because otherwise if the damage to your property is not covered by your insurance, you can be at a financial liability which is never an ideal situation to get into.
Which is where Rigby Financial brand promotion comes in; whether you are a millennial who has decided to rent out properties to third parties or are a couple looking to build up their property portfolio, the team works with the UK’s leading insurance brokers to provide you with a commercial building insurance policy that ticks all the right boxes. For example let us imagine that you are leasing a house out to a couple and unfortunately flooding occurred in the home and as a result half of the property will need to be repaired. Yet unfortunately you did not take out insurance meaning that you had to find a way to repair the damage from your own pocket, resulting in a lifetime of hard earned work and determination being undone in one horrific incident. But when you ensure to ‘insure’ your houses, it means that you are not only protected against damages and repairs, but knowing your rights as a landlord will allow you to always ‘prepare for the unknown’ , protecting your business and portfolio in the long run. Because while it might cost more to set up insurance, it is better to be safe than sorry. Besides commercial property insurance covers the following: Buildings Insurance, Loss Of Rent Insurance, Rent Guarantee Cover and Fire & Special Perils Cover, which includes dealing with legal expenses and so much more.
It goes without saying that part of knowing your rights as a landlord is to ensure you know ‘exactly’ what and how you are paying for something as tricky as ‘insurance’. For example you might think that all ‘commercial property insurances’ are the same but many will need a fee for additional add on’s like legal expenses, although the majority of ‘insurances for properties’ do have a basic policy which will usually include cover for any damage to the structure of your property and its contents, including issues caused by fire, flooding and vandalism, because these are elements that are characterized as being out of your control. However with ‘basic policies’ it might not cover ‘purposeful damages’ which can be caused by residents, so it is important that you know exactly what you are signing up for. Another important concept to understand when you are looking at your rights as a landlord is the idea of a ‘Indemnity Period’, which results in a loss of rent. Essentially if your property should become uninhabitable from an insurable event such as a fire, the insurance will pay out for the rent you are subsequently unable to collect, meaning you aren’t losing out financially. So therefore the ‘Indemnity Period’ refers to the length of time you can claim for ‘loss of rent’ expenses, which is needed in extreme circumstances such as these.
It can be tricky to wrap your head around jargon like an Indemnity clause and while being a landlord is never easy, you should always get to know your rights as a landlord owner or prospective landlord, to prevent against any catastrophes further down the line. After all there is nothing more satisfying than having peace of mind, knowing that you are prepared for any disaster that might come your way. Question is have you ever thought about becoming a landlord?If so why?
What Are Your Thoughts On Commercial Property Insurance?
Please note this is a collaborative post but all thoughts are my own.