Alternative accommodation insurance for landlords is a form of cover that provides protection in case a property you let becomes uninhabitable resulting in you needing to provide an alternative arrangement for your tenants.
It can help to cover the costs you may incur in providing temporary accommodation. This form of insurance can be combined to form a part of landlord insurance or can be chosen as an add-on.
Providing alternative accommodation to tenants if a property becomes uninhabitable is not necessarily a requirement for a landlord. However, if your tenancy agreement details that you’re obliged to provide tenants with a place to stay in such circumstances, it is recommended to opt for this form of insurance.
There may be damage caused to your property by unforeseen events such as fire, flooding, or other natural disasters that could result in your property being uninhabitable for your tenants. However, damage to property as a result of tampering or intentional acts of destruction is usually not covered under this policy.
As a landlord, you may choose to specify other risks you’d like to guard against if you believe they could compromise your property’s suitability for tenants. For example, you might look to cover the central heating, if you believe that loss of heating during winter would result in your property being uninhabitable.
In the event that you make a claim on your alternative accommodation insurance, this policy provides cover for the expenses incurred to provide an alternative place for your tenants to stay until the damage is repaired. In most situations, the type of accommodation the tenant moves into, must reasonably match the conditions of their rented property. For example, if your property is a two bedroom detached house, the new stay option for the tenant must be a similar one. This is to ensure that the rent for the new property is relatively similar to the rent you’re currently charging tenants.
Sometimes, your property may experience damage that can be fixed within a short period of time. In such instances, your tenants may prefer to stay in a hotel or share accommodation with a friend or family member. In the case of a hotel stay, this policy covers lodging charges for a room of similar value to your property.
If your tenants are staying with a friend or family member, expenses incurred by the hosts because of additional members in the house may be covered. If the stay lasts for more than a month, an amount equal to or lesser than the original rent amount may be covered depending on their property conditions.
There are a few insurance providers who also cover expenses incurred on accommodation of pets belonging to your tenants during such circumstances. This largely depends on the clauses included in your policy at the time of purchase. Read more about landlord insurance here.
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