What types of insurance do landlords need to have in place?

A common question we get asked is what types of insurance you should have in place as a landlord.

We often find this being an area that landlords want to scrimp and save on, however whilst it’s always recommended to use the services of a quality broker to get you the best deal you will want to make sure you’re covered.

We thought we'd outline the key areas of insurance we recommend landlords have in place as you only need it when you need it, but when you need it you often REALLY need it!

What is Landlord Insurance? Landlord insurance is a specialised type of insurance tailored for rental properties. It offers protection for your property and includes a customised policy to meet the specific needs of landlords. This often covers costs related to legal disputes with tenants and unpaid rent.

Is Landlord Insurance a Legal Requirement? While it’s not legally required to have landlord insurance, it might be a condition for obtaining a buy-to-let or landlord mortgage. Additionally, landlord insurance provides extra protection that standard home insurance policies don’t offer, safeguarding your finances, property, and reputation.

Buildings and Contents Cover Standard home insurance covers buildings and contents, but it won’t cover intentional damage caused by tenants. Regardless of how carefully you select your tenants, there’s a risk they could cause damage, such as breaking a window or door. Landlord insurance covers these scenarios.

You don’t need to insure your tenant’s belongings; they are responsible for their own possessions, including any furniture they bring to your property.

Loss of Rent Landlord insurance can also cover loss of rent, which can result in significant financial losses, especially over extended periods or multiple properties. Rent loss can occur if a tenant defaults on payment or if the property becomes uninhabitable due to events like fire or flood. Rent guarantee covers tenant defaults, while rent protection covers uninhabitable properties. Some insurance providers offer both, while others may offer just one.

Additionally, you might consider alternative accommodation cover, which covers the cost of arranging temporary accommodation for your tenants if your property becomes unsafe. This ensures your tenants have a place to stay while you address property issues.

Property Owners’ Liability Accidents can happen, which is why property owners’ liability cover is important. If a tenant is injured or has an accident on your property, you could be liable for costs or damages. This cover insures you up to a specified amount, protecting you from having to pay out of pocket. This is typically included in a landlord insurance policy and covers a range of claims, such as:

  • A tenant injuring themselves on a loose floorboard
  • Roof tiles damaging a tenant’s car
  • Gas explosions damaging a tenant’s belongings and causing injury

Legal Expenses In addition to public liability cover, you might want to add legal protection to your landlord insurance policy. While this often comes at an additional cost, it can save you money if you need to make a claim. This covers legal costs associated with disputes, whether initiated by you or your tenant, including evictions, late payments, or lease violations.

Unoccupied Property Insurance If your property is likely to be vacant for an extended period, consider unoccupied property insurance. This is separate from landlord insurance and covers theft, vandalism, natural disasters, and gas or oil leaks while the property is empty. This is particularly useful if you’ve recently purchased the property and are looking for tenants, rent to students who go home during breaks, or often have gaps between tenants. Empty homes are at higher risk for break-ins and vandalism, making additional protection worthwhile.

If you have any questions or would like some more information, then we’d be more than happy to help.

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