Whether you are a landlord or considering becoming one, it is important to find out what insurance you need as a landlord and what the options are. There is plenty that can go wrong when there are tenants in the house and the right insurance will ensure you don’t foot the bill when the need arises.
Let’s take a look at what makes up landlords insurance and why it may be useful.
First of all, do you have to have a landlords insurance?
The answer is no, there is no legal obligation from the government to take out a landlords insurance. However, some lenders make it a requirement of taking out a buy to let mortgage.
Landlords Building and Contents Insurance: This is similar to the residential buildings and contents cover but tailored towards tenants as lenders consider tenants as a different level of risk to you the owner, living in the property. This will typically cover damage to the building in case of flood or fire while the contents insurance will cover for your contents damaged or stolen by someone other than your tenant. It is important to read the fine print of what exactly is covered and what the exclusions and excesses are for the policy before you take one out.
You can also add on extra cover for accidental or malicious damage or theft by the tenants themselves as this is not covered in a standard landlords building and contents policy.
Landlords Liability Insurance: This is useful for covering yourself against tenants who may have an accident in the property and sue you.
Loss of Rent Insurance: This one is key if your property becomes uninhabitable and you can’t rent it out for a period in time as you still need to pay your mortgage while losing out on the rental income.
Legal Expenses Cover: This covers any potential legal costs following possible disputes with tenants, including evictions and repossessing properties.
Landlords Home Emergency cover: This one is useful, as this covers incidents like a gas leak, burst pipe or a boiler breakdown which is not covered in the standard Building and Contents Cover.
To sum it up, there are a lot of different elements to look at while considering landlords insurance and they each cover a different aspect of renting out a property. It is always worth researching to find the right deal for you and sometimes the same insurer may cover more than one element.