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

landlord's insurance

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, you will need several types of insurance to safeguard every aspect of your rental. In this article, we will cover the different policies landlords need, what exactly each 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 building insurance.

Without building 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 building insurance in place may be a condition of your mortgage. If you’re not sure, check your agreement to confirm.

Landlords must know that Homeowners Insurance does not apply to a rental property. Instead, building insurance is required.

Learn more about the difference between landlords’ and homeowners’ insurance here.

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

Landlord’s Insurance: Contents Insurance

Two types of contents insurance are 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 fully furnished property. 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 protects the landlord against any loss, damage or injury sustained by the tenant or their visitors while in the rental property. It will cover the landlord’s legal costs if the tenant files 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, several things 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 protects the landlord against any rent loss should the tenant default on rental payments. If you rely on your tenant’s rent as your main source of income, having rent guarantee insurance in place will ensure you’re not left out of pocket if your tenant doesn’t pay the rent.

Rent guarantee insurance is included in our Rent on Time management plan. From £99 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 worsens things. 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.

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