Landlord's Insurance - What do landlords need to cover?

By Matthew Daines

man purchasing landlord's insurance

Landlord’s insurance: What you need and why you need it

Last updated on December 6th, 2019 at 01:14 pm

Landlord’s insurance protects landlords against financial losses associated with their rental property. With the ever-increasing demand for rentals, landlords need to safeguard their homes – and their rental income – against any eventuality.

As a landlord, there are several types of insurance that you will need in order to safeguard every aspect of your rental. In this article, we will cover the different policies landlords need, what exactly each one protects and – most importantly – why you need them in place.

Landlord’s Insurance: Buildings Insurance

Buildings Insurance covers the cost of repairing the structure of your property in the event of any large damage. A general policy usually includes protection from damage caused by bad weather, fallen trees or lampposts, fires, explosions, frozen or burst pipes, vehicle collisions, vandalism and theft. Small maintenance work needed due to general wear and tear is not covered by Buildings Insurance.

Without Buildings Insurance, you could be putting yourself at serious financial risk. Although the likelihood of severe weather damage or break ins may be low in your area – you shouldn’t leave things to chance. The potential loss and serious emotional stress that damage like this would cause you without insurance would be far worse than paying a premium.

Having Buildings Insurance in place may be a condition of your mortgage. If you’re not sure, check your agreement to confirm.

Landlords must be aware that Homeowners Insurance is not applicable to a rental property. Instead, Buildings Insurance is required. Find out more about the difference between Landlords Insurance and Homeowners insurance here.

Buildings Insurance is also available as a combined policy with Contents Insurance.

Landlord’s Insurance: Contents Insurance

There are two types of contents insurance available to landlords: Limited Contents Insurance and Full Contents Insurance.

Limited Contents Insurance is an ideal policy for landlords renting out an unfurnished or part-furnished property. It covers items such as white goods, electrical equipment, carpets and curtains.

Full Contents Insurance would be more appropriate for a landlord renting out a property that is fully furnished. This will protect everything in the property that the landlord has supplied and give them peace of mind knowing that if anything is damaged by the tenant, the cost is covered.

It’s important to remind your tenant that their belongings are not covered by your Contents Insurance. To protect their own possessions, they must take out their own policy.

Many landlords purchase Buildings and Contents Insurance as one policy. Our partners at Alan Boswell can give you a quote for your property today. If you already have insurance, Alan Boswell will aim to beat your current premium.

Landlord’s Insurance: Liability Insurance

Liability Insurance offers the landlord protection against any loss, damage or injury sustained by the tenant or their visitors whilst in the rental property and will cover the landlord’s legal costs in the event of the tenant filing a personal injury claim. However, the best way to avoid this happening in the first place is to ensure the property is safe secure and in good repair before the tenant’s move in and to ensure all maintenance and repairs required are carried out immediately.

What affects your insurance premium?

For all landlord insurance, there are several things that will affect the cost of your premium.

  • Tenant type – Some insurers view HMOs and tenants in receipt of housing benefit as higher risk
  • Location – Properties in areas with higher crime rates or high risk of flooding will have a higher premium
  • Type of building – Listed buildings or properties in a conservation area will be a higher risk
  • Age – Older buildings may have higher premiums due to older construction standards and materials
  • Previous claims – A history of previous claims will affect a landlord’s insurance

Rent Guarantee Insurance

Rent guarantee insurance offers the landlord protection against any rent loss should the tenant default on their rental payments. If you rely on your tenant’s rent as your main source of income, having rent guarantee insurance in place will ensure that you’re not left out of pocket if your tenant doesn’t pay the rent.

Rent guarantee insurance is included our Rent on Time management plan. For £89 a month (inc VAT), your rent will be paid on time every time– regardless of whether your tenant pays. Find out what else is included in our Rent on Time package here.

Legal Expense Insurance

Legal Expense Insurance is usually combined with Rent Guarantee Insurance. If your tenant falls into arrears or a situation arises that means you need to take legal possession of you property, Legal Expenses Insurance will cover all your legal costs.

Taking a tenant to court is a stressful and time-consuming experience – a huge legal bill only makes things worse. Legal proceedings are very expensive, but with insurance in place you’ll have one less thing to worry about.

Legal Expenses Insurance is included in our Guaranteed Rent and Rent on Time management plans. Explore our range of packages here.

About Matthew Daines

Matthew DainesAs COO of LettingaProperty.com since 2011, Matthew holds a dual role in management and operations. His strategic, focused and goal orientated experience in achieving results within international, high-profile organisations adds to LettingaProperty.com’s continual success and innovation within the private rental sector.

2 Comments

    February 10, 2014 REPLY

    I’ve stayed at the property for 5 years. My rent went automatic to her she stays in Italy . My rent stopped and she didn’t tell me for 6 months she tried to give me my notice but it’s going to court now for illegal eviction the all of a sudden she’s took a contents policy out at my address and it was unfurnished

      February 10, 2014 REPLY

      This has being going on for a year and she only took it out last month cause she knows I’m moving

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