So, you’re about to buy your next property or indeed your first one. It’s an exciting time, what insurances do you need to have in place before the dust settles on that property. Right, how do they benefit you is the most important part of that.
So you definitely need landlords insurance and you definitely need building & contents insurance, so let me go through those two and how they benefit you. So, when you settle on the property the bank will require a certificate of currency to say that you have adequate building insurance in the event of fire or something like that so you need to ensure your building structure for what you think it would be worth to replace it. Now that’s very different to what it’s actually worth today, so you need a really good insurance broker or talking to a sophisticated insurance company out there that says “Yeah this is what we maybe think the home is worth to replace”. So you need to have adequate building insurance when you are a home owner now that’s whether you’re living in it or not.
If you’re an investor you definitely need landlords insurance. Now landlords insurance covers two main things; One, rent default and two, malicious damage. So the tenant has created some damage to your home you need to have insurance cover that fixes that and you pay the excess but nothing else, you need to be covered in that event because you don’t know what happens in this world. The rent default is if your tenant decides “No I’m not going to pay rent because I’ve lost my job etc”. So again you pay an excess and you’ve got cover up to a certain period on that. So you need to check your insurance policy, number one that you’ve got landlords insurance but number two, to what level you’ve got that malicious damage and the rent to fold I think they’re two really big ones. Now there’s a few others that you need to take into account but they’re the two main ones right.
If you’re living in your home you must have contents insurance, right contents is all your clothes, your white goods, all your belongings basically in your existence. Now, how much is that? Well it’s very hard to audit your life but you need to give an approximate, so you need to be able to go through and definitely cover yourself in the event that something happens, the house burns down etc. Now do you need contents insurance when you are an investor and you’re basically the landlord? Well the answer is yes you may need to be covered for fixtures and fittings and blinds and things like that, so just make sure that there’s crossover there and you’ve got cover in either your building insurance, or as a separate contents insurance amount. So there you have it folks, lots of things to consider when buying a property but in the insurance space you must have those as non-negotiables all others over and above that a little bit of a bonus and it really depends on your situation as to whether you need them or not.