What is Landlord Insurance
Landlord insurance is a type of home insurance designed explicitly for rented properties. The basic insurance policy for landlords usually covers three areas — buildings, content and liability. Unfortunately, standard home insurance policies aren’t suitable for rented accommodation. This is because rental property owners and landlords face unique risks running a rental business.
Why Landlord Insurance is Vital for Rental Property Owners
Like all types of insurance, landlord insurance is designed to cover damage caused by unforeseen events. It is usual for landlords to arrange coverage for structural damage to buildings, the cost of repairing damaged contents, and public liability for accidents. Because claims can run into hundreds of thousands of pounds, it makes sense to get yourself insured.
Landlord insurance is typically mandatory when taking out a buy-to-let mortgage. This is because mortgage lenders rarely lend money to buy investment properties without suitable cover in place.
Basic Types of Insurance for Landlords
You usually insure individual rented properties. However, some insurance providers offer portfolio policies for four or more places. What policies are available to landlords, and what do they cover? Here are some of the most common insurance policies offered to landlords.
Buildings insurance for landlords
Building insurance covers the cost of repairing or rebuilding a rented home after a disaster or accident. Usually, insurance for buildings pays for damage caused by theft, storms, subsidence, burst pipe, fire, smoke and similar damage. To get a quote for landlord buildings insurance, you should know the rebuild value of your property.
If you own a leasehold property then buildings’ insurance is normally arranged by your block manager and is paid for by the leaseholders through the service charge. It is a legal requirement to have buildings’ insurance on a rental property.
Contents insurance for landlords
Landlord contents insurance is usually an add-on to buildings insurance. This policy covers the cost of repairing or replacing fixtures included in the rental price. Contents insurance is advisable if you let furnished apartments or homes.
Why is insuring contents a good idea? For example, let’s say a fire in an adjoining flat causes extensive damage. Buildings insurance will only cover the cost of structural parts of the property. However, you need contents insurance to cover accidental damage to items like furniture and carpets.
It is also vital that tenants realise they should take out their own contents insurance policy. For example, the tenancy agreement could state that renters insurance is necessary.
Public liability insurance for landlords
Landlord public liability insurance is crucial if a tenant sues you for an accident while living in the property. For example, say a tenant trips on an ill-fitting carpet and sustains a severe injury. Or a burst pipe destroys their personal items. In that case, you must have insurance to cover the cost of damage. It is usual for landlords to get insurance for over a million pounds worth of cover.
Additional Landlord Insurance Policies
In addition to building, contents, and public liability cover, you may want to consider other types of landlord insurance.
Rent guarantee insurance
Insuring against rent defaults and void periods is helpful for landlords with high-ticket rented apartments. Rent guarantee insurance also covers legal expenses associated with evictions and repossession costs. During legal proceedings, you will receive interim rental payments.
Property portfolio insurance
If you own four or more rented properties, taking out a property portfolio policy can be cost-effective. This usually includes buildings and contents. However, you should check the small print to know what exactly is covered.
Home emergency cover
Landlords have the legal obligation to provide essential utilities and services to tenants 24/7. This means that you must arrange repairs promptly in the event of an emergency. Home emergency cover covers the cost of restoring services as fast as possible.
How to Find the Best Deals for Landlord Insurance
The average cost of landlord insurance is below £200. However, the price depends on the total rebuild cost of the building and the contents insured. So, for example, a rented three-bedroom apartment in Canary Wharf will be significantly costlier to insure than a small one-bedroom flat in an ex-council block of flats.
Do you have a property to let in Canary Wharf and need a trusted letting agency to manage it? Do you have questions about landlord insurance? If so, please get in touch with Property Local. Our team of agents is here to help you manage all aspects of property management, including giving you further information on insurance coverage for your rented apartment or house.
