A beginner’s guide to landlord insurance
Landlord insurance is always worth the financial outlay. If you have an investment property, landlord insurance will cover you for any damage to the building itself and the contents inside it. It will also cover you for any damage caused by tenants. If you’re renting out a property, landlord insurance is necessary – standard home insurance is not sufficient for rental properties.
Landlords are under no legal obligation to take out an insurance policy. However, if the property is mortgaged, your mortgage lender may stipulate that you take out insurance.
What does a landlord insurance cover?
Policies will vary and cover different things. A basic policy will cover the minimum, and you will have the option to add on extra cover. A better policy will cover most things a landlord will be looking for, such as building insurance, contents insurance, and liability insurance.
What are the types of landlord insurance cover?
- Landlord building insurance – this is important, and will cover the cost of repairing or rebuilding the property if it is damaged by flooding, subsidence, fire, lightening or vandalism etc.
- Landlord contents insurance – the amount of cover you’ll need will largely depend on whether you are renting the property furnished or unfurnished. If furnished, you may want to ensure items such as white goods, appliances, and furniture is covered. However, this will only cover the things that you own within the property. If your tenants want to insure their own possessions, then they will have to take out their own insurance.
- Property owner’s liability insurance – this will cover you if a tenant receives an injury while at the property and wants to make a claim against you. If you employ a cleaner or gardener, then you might also want to take out employer’s liability insurance, which will cover you against any claim made by someone you employ to carry out work at the property.
- Loss of rent insurance – this will cover you if the property, for whatever reason, becomes unlivable and the tenants have to move out.
- Accidental damage insurance – this will cover any accidental damage. This will usually be covered in building and contents insurance, so be sure to check.
- Legal expenses insurance – if you incur legal expenses, such as if you have to take action against a tenant, then this insurance will cover you.
- Rent guarantee insurance – if a tenant fails to pay the rent, rent guarantee insurance will compensate the landlord accordingly for a set period of time.
- Landlord emergency cover – this will cover you if there are any problems with the plumping or heating, such as boiler breakdown or a burst pipe. With emergency cover you will be covered 24 hours a day.
- Unoccupied property insurance – a vacant property can be more at risk of vandalism or burglary. If a property is unoccupied for more than 30 days at a time, your ordinary landlord insurance can become invalid, at which point unoccupied property insurance will cover you.
The cost of taking out a landlord insurance policy will vary depending on the age of the property, the nature of the tenants (for students, for example, it might cost a little more), and the amount of cover levels you take out.
Some insurance providers will offer discounts or deals if you take out building and contents insurance at the same time. There may also be deals/discounts available for landlords who want to take out insurance on multiple buy-to-let properties.
Landlord insurance is a must for those who want to protect their investment. If you’re thinking of renting out your property in Islington, Stoke Newington, Newington Green or Highbury, get in touch with us today.