For many property owners, often a primary concern is that a fire or similar damage could make their property they own uninhabitable, and therefore deprive them of the rental income that it generates. And of course, this is very important. After all, even if you do not have any borrowings to service, the income is important to cover insurance, rates and other overheads, as well as your own income. That is why property owners insurance provides loss of rent from the time that a fire, flood, or other event happens right up until the premises are once again habitable.

But in times of economic uncertainty, this is not the sole problem that a landlord faces. Those occupying residential accommodation can face financial difficulties during a recession and while they may well be able to obtain some support from the government in time of hardship, there is no guarantee that this will always reach the landlord. In fact, this could result in landlords losing their income just as much as after a fire or flood!

It is for this reason that rent guarantee insurance has been developed. There are a number of schemes available but the best generally provide insurance to cover the landlord's loss of rent for anything up to a year after the tenant has ceased to pay rent (although it is normal to exclude the first month's rent, because this is usually covered by the deposit).

The scheme will usually cover lost income until the premises are back under the landlord's control; although, many schemes also provide replacement income until a new tenant has been found, usually subject to a time limit. Schemes also normally include the costs associated with eviction proceedings - including professional fees - and other legal costs.

One useful extension to the legal expenses cover can be for legal defence of the landlord, in the case of a counter suit for illegal eviction. Legal expenses insurance would also normally cover the cost associated with pursuing a tenant for costs associated with making any damage caused to the premises, should this occur.

Cover of this nature was formerly normally only through letting agents, but it is now available to any landlord who arranges his or her own lettings. One important aspect of cover is that it will normally require that each tenant - or the guarantor - is subject to adequate references in advance of the letting. In fact, it may not be necessary for the insurance company to see the references in advance, but in the event of a claim, it will be necessary for the landlord to be able to demonstrate that suitable checks were made. Schemes are available that can make this relatively inexpensive, often costing much less than 10 per cent of a month's rent.

What's more, the cost of landlords insurance is not particularly high; even to cover rent up to as much as £25,000 a year plus double that in legal expenses need not cost more than £10 a year, per property. However, as the actual cost per year for each property is only £7.80 there exists a minimum annual charge for each landlord of £126 inclusive of tax. This means that you could cover up to sixteen properties within the minimum annual charge.

As you can see, reviewing your property owners insurance is always a good idea, but this should be done in the light of ensuring that adequate cover exists, at the right - but not necessarily the cheapest - cost.

Article Source: http://www.ArticleBlast.com