Landlord insurance is a must for every landlord as it will protect their property from certain damages caused by different factors as determined through terms and conditions. The premium the landlord has to pay to the insurance company depends on the different factors set out by insurance companies.

Security, fire and the general neighborhood are usually the factors that could affect the premium of the policy holder. If the landlord could protect the tenants and the property from fire and maintain security in a good neighborhood, the premium will be kept to a minimal.

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A Bigger Challenge for Landlords

But there exists another concern for the landlords which could single-handedly increase the premium of their insurance: scams. Unfortunately there are people whose only goal is to get money from other people the easiest way possible, which is usually illegal. Scams related to rental property exist and it could affect the premium of any property. Properties for sale could be affected by scams but it could affect more to rented properties. If the landlord does not take extra precautions to secure the property, the premium the landlord has to pay will gradually increase.

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How the Scam is Done

The scam usually works this way:  It starts with an available property for rent. When the scammer sees this, he will also make the same post in the newspaper. They will not reveal the actual area of the property but will just sprinkle them with nice words such as “great view with an affordable rate in downtown area” and they will provide their mobile phone as a contact. Of course, they have already seen the area as an interested renter. They will usually stake out the property to determine if the landlord lives there and how frequent they visit the property.

If someone calls them, they invite them to visit the property and take a look for themselves. The scammers will introduce themselves as landlords and will show them around the property. Instead of offering the normal price, they will considerably reduce the price to entice the potential renter from signing-up right then and there. They will then require the potential renter to provide with an upfront cash payment as a reservation fee which could also be used as an advance payment. The scammer lets the renter sign a bogus document. The renter will just show up on the day of moving frustrated because they have not made any transactions to the real owner.

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How will this Affect your Premium

This type of scam will greatly affect your premium as the news will spread regarding your area as a victim of scam. Although it is not entirely your fault, the fact that you have not made enough security within the area will affect your premium. Your premium will even blow up if the scam becomes well known.

That is why extra security should be done in your property. If you do not live in the property, be sure to visit your property more often to ensure no one is there posing themselves as landlords.