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Home > General Insurance > Do You Know Enough About Landlord Insurance? Do You Know Enough About Landlord Insurance?Author: Jitesh Arora Landlord insurance is a protective mechanism that provides a safety feature for your property. The biggest loss does not come from a known certainty but is a result of unknown mishap and with no backup plan to support it; you can be in a financial crisis as you will have to bear the expenses for the reconstruction of the property. Landlord insurance follows some of the basic rules to provide financial aid to the insured person. Some of these rules are given below:Insurable interest - It is the subject matter, the existence of which affects the insured. In simple words, Insurable interest means, insured suffers loss by destruction or damage of insurable interest and gains with the safety or existence of it. The landlord insurance is no exception to this rule. Landlord insurance covers all the assigned risks and pays the compensation in the occurrence of any. Utmost good faith - In case of landlord insurance, the principle of absolute good faith applies, i.e., all the facts which affect the judgement of decision of both parties must be disclosed by both insurer and insured. The disclosure must be full and true. There must not be any misinterpretation, misrepresentation or fraud concerning any material fact. Landlord insurance is based upon mutual trust and confidence. Indemnity - Landlord insurance is the best example of indemnity. Indemnity implies that the insurer will make good the losses suffered by the landlord and put the insured (landlord) in almost the same position as was prevalent before the mishap. Proximate cause - While making payment of claim in case of landlord insurance, the insurer must see the real cause of loss was insured or not. In other cases, the insurer may not be liable to pay any compensation. The real cause responsible for the loss is called the 'proximate cause'. There cannot be any one yardstick to determine proximate cause. Its determination depends upon the working and practices of insurance as well as circumstances to the loss. The loss can be caused by a single cause or a chain of causes. Mitigation of loss - This principle places a duty on the landlord to take all reasonable steps to minimize losses. For example, the landlord should make appropriate safety arrangements as regards fire, theft/burglary, floods etc. or for any foreseeable risk, which may be area-specific or depending on the climate. The premium paid and the compensation to be made are also related to each other depending on the above factors and the onus is on the landlord to make arrangements for mitigating losses - in a way, enhancing its compensation package. These are the basic principles on which the whole process of landlord insurance is set up. Understanding all these principles is an utter necessity for an individual if he has to avail any benefits from the policy. Precaution is better than cure correctly implies at this situation as repenting after the occurrence of any mishap is a fool's job but to secure it before anything strikes you is a wise man's step. If you are looking for more information regarding Landlord Insurance then feel free to visit http://www.landlordbuddy.co.uk. Other Recent Insurance Smart Book Articles:
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