All You Need To Know About Landlord Insurance
If you’re a landlord – whether you have one investment property or a portfolio of homes you let out – you’ll need comprehensive insurance to cover you and your rental properties.
What is landlord insurance?
Landlord insurance is specialist cover to protect you from the various risks associated with letting out property.
It covers buildings and contents from fire, flood or theft and even vandalism and it can also cover against liability claims made by tenants.
Be aware that if you’re letting out a property, standard home buildings and contents cover will not cover you for many of the eventualities you can encounter as a landlord.
Different types of landlord insurance?
There are different types of landlord insurance. You may not need to cover all risks or you may want comprehensive cover for everything.
Here are some of the risks you’ll need to consider when looking at insurance:
- Buildings insurance: this will cover any damage to your property and its fixtures and fittings, from things such as fire or flood (escape of water)
- Contents insurance: Covers the items belonging to you in the property, such as furniture and electricals
- Liability insurance: legal cover or public liability insurance in case a tenant takes you to court. A tenant may slip or hurt themselves, for example, on loose carpet or flooring that you’ve put down, and they could sue you
- Tenant payment default: Sometimes referred to as rent protection insurance, this is cover for non payment of rent by your tenants. You can also get rental protection insurance that pays out when you can’t let a property, for example due to damage – or if you’re unable to find tenants for a time
- Unoccupied property: Insurance to cover your property, for example against damage or thefts, while it is vacant – perhaps due to renovations or maintenance work. Unoccupied usually refers to the property being empty for more than 30 days
- Employers’ liability: This is a legal requirement if you employ someone who is directly under your supervision and control, such as a cleaner, maintenance worker or gardener, at your property. The insurance will cover you for legal costs in the event there is legal action against you by an employee for injury or illness caused due to your negligence.
In some cases you will have to buy different standalone insurance policies to cover the different risks. Alternatively, some specialist landlord insurers can include add-ons to their policies.
Is landlord insurance compulsory?
While there is no legal requirement to have insurance if you’re a landlord, most mortgage lenders (if your properties are mortgaged) will require you to have buildings insurance and some will want you to have specialist landlord cover as a condition of your loan.
Remember standard buildings and home contents policies won’t cover you as a landlord, and other events related to letting a property.
What doesn’t landlord insurance cover?
Landlord home emergency cover may be offered as an add-on to landlord home insurance – but it is an extra (not included as standard) and will come with added cost.
This cover could be worthwhile to cover you for home emergencies, such as burst pipes or boiler breakdown (not due to age or wear and tear), roof damage and leaks or blocked drains, for example.
As with any insurance claim there will usually be an excess to pay toward the cost of any claim on your landlord insurance. The excess is the first part of a claim which you’ll be asked to pay. Read the terms and conditions of your policy, and importantly any exclusions, to avoid nasty surprises down the line if you need to claim.
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