Are you becoming a landlord and need to divulge into the world of landlord insurance? Or maybe you’re already into property investment and need to renew your policy. In this blog, we cover what landlord insurance is, what makes a good policy, and some of the best places to look.
What is landlord insurance?
As with most insurances, landlord insurance protects you from risk, specifically to do with your rental property. It can come as a package which includes buildings and contents insurance, and can also come with landlord-specific covers like the property owners’ liability, loss of rent, and tenant default insurance.
If the structure of the property is damaged or destroyed, landlord buildings insurance can cover the cost of rebuilding or repairing. Contents insurance can protect your furniture or other items if they get stolen or become damaged.
If your tenants fail to pay, tenant default insurance can cover you for the rent lost over some time. If a tenant or visitor to your rented property claim for an injury related to the home, property owners’ liability insurance will cover you for this.
Is landlord insurance essential?
Landlord insurance isn’t a legal requirement, but if you’re purchasing the home with the help of a mortgage lender, they will often require proof of it.
Bear in mind that a standard home insurance policy most often doesn’t cover you for issues related to renting out the property. Whether you have one or more houses that you let out, it’s best to get the right insurance in place to protect you and your properties.
How much cover do I need?
Check the rebuild value of your rental property, as you’ll want your buildings insurance to cover this. You should base your contents insurance cover on what it would cost to replace all contents in the property (not including the tenants’ items).
For property owners’ liability insurance, you’ll want to base your cover on how high you think the chances are that a tenant or visitor makes a claim. This cover will often be in the millions of pounds.
Regarding tenant default insurance, work out how much rent you’ll be charging per month and get a policy that covers this.
What makes a good landlord insurance policy?
As with many purchases, take a look at reviews of the insurance providers. You won’t only want to look at the star rating, but also the number of reviews. A 4 star rating with just 5 reviews doesn’t mean much, but with 2,000 reviews is much more reliable.
A good policy will offer a high level of cover without costing the earth. It will not only cover buildings insurance, but also contents, any damage caused by tenants, loss of rent, white goods cover and more.
Where should I look for a policy?
Take a look on comparison websites to find a policy suitable for you. Everyone’s needs will be different so we can’t suggest a specific policy. You may also find it beneficial to get quotes from some providers directly, especially if you’ve been impressed by their reviews.
I began writing for Property Press Online in October 2019. Particular areas of interest are housing market news and new developments in the market.