“My tenants burned down my house” – Why a good insurance policy is a must for landlords!
When owning a property, taking out insurance is crucial and it is even more important when you are renting out your property and effectively entrusting it to someone else. If you have a mortgage on the property, it is likely that this is a requirement in any event, however if you are mortgage-free, do not avoid obtaining insurance just because it is an added cost.
We dealt with a case recently where a landlord owned a number of rental properties, and one in particular contained a beautiful stonework fireplace with a cast iron wood burner. After months of living in the property with no problems, the tenants made a serious mistake: they lit the fire and then forgot about it!
They went out for the day, and it is fairly obvious what happened next. There was a serious fire in the property with devastating consequences. Thankfully no one was home at the time of the fire, and no one was harmed, but the landlord was left in a position where not only had his property been destroyed, but he was also responsible for providing suitable alternative accommodation for the tenants until the repairs have been undertaken – something which could take several months.
On a more positive note, this particular landlord was insured for such an eventuality, and the thousands of pounds worth of damage was covered by the insurers for a modest excess fee. The repairs and redecoration took place quite swiftly, and the tenants were able to move back into the property after only a few months.
But what would have happened if the landlord hadn’t been insured? Not only would the damage to his property have cost him an excessive amount of money, but he would also be responsible for providing accommodation to the tenants until the property was restored – tenants who themselves had lost everything in a devastating fire and may not be in a position to continue to pay rent for a period of time.
Potentially, this expense could result in a landlord having to sell the property altogether.
Remember, this is just one example, and fire is not the only risk. There are other issues that can arise with a property such as subsidence or, as we have just been reminded with the huge storms in the UK, weather damage. When renting a property, landlords have a duty to ensure that the property is fit for purpose, so these issues need addressing immediately and, without insurance, landlords could end up having to find a large sum of money with little notice.
if you need help navigating any similar issues with your tenants then feel free to give us a call and we will happily work with you to achieve a solution.
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