Investment Owner Mortgage
Investment Owner Mortgage | Property Investor Protection Guide
When you have taken out an investment owner mortgage you will need to take steps to protect that investment. That doesn't mean erecting barriers or hiring security guards, but making sure you have the right type of insurance so that if anything goes wrong, your investment owner mortgage is covered.
There are several types of insurance landlords can get to protect their mortgage. One of the first areas for protection is the rental property itself. Buildings insurance will cover a property for a range of risks. For example, if the building is damaged by a fire, floods, storms, lightning or other natural disasters, buildings insurance will cover the cost of rebuilding the property. Having buildings insurance is usually a requirement of an investment owner mortgage.
However, that's not the only protection that is needed for an investment owner mortgage. Whether a property is furnished or unfurnished there will be items that need to be protected. Even with an unfurnished property, a landlord with an investment owner mortgage would do well to have contents insurance to cover any damage to the cooker, fridge freezer, washing machine, carpets or curtains. And with a furnished property, a landlord with an investment mortgage also has chairs, tables, sofas, beds and other furniture to protect. In many cases, this insurance will provide new for old cover, just as with domestic insurance.
With both types of insurance, a landlord with an investment mortgage may be able to get cover for accidental damage, which is useful for a rented property. There will also be some cover for theft from the premises. Some insurers offer specialist landlord insurance to holders of an investment owner mortgage. This includes buildings and contents cover, as well as other forms of insurance that might be useful for landlords.
BTL Mortgage Cover
Examples of this cover include public liability insurance, which can be useful to someone with an investment mortgage. This type of insurance protects the landlords for claims made if members of the public get injured on their property. An example of this would be slipping on a step. Public liability insurance can provide compensation for the loss of an eye or a limb, disablement or death, and the landlord will be insured from the financial effects of a successful claim.
Another form of insurance may be more useful to the professional landlord. If the landlord has hired someone else to manage the property, then employer's liability insurance is legally required. Like public liability insurance, employer's liability insurance covers the landlord for claims made by employees who sustain injury or become ill in the course of their work. Claims of this nature can be costly and might negate the value of an investment owner mortgage. Landlord insurance may also include rental void insurance, which compensates landlords for recovery costs incurred when tenants fail to pay rent.
Finally, landlords with an investment owner mortgage need to take steps to protect their investment with critical illness cover and life insurance. This will mean that their families don't suffer financially if they become ill. They can also be sure that their investment owner mortgage will be repaid.
