Understanding Landlord Insurance for Newbies

Landlord Insurance Contract Signature Field

Investing in property involves spending your hard-earned money, which is a big risk. The last thing you want to happen is something that could damage your investment to an extent that would cost you even more money to repair – if it can be repaired.

Fortunately, insurance exists for landlords who want to protect what they own from the threat of costly damages and unforeseeable circumstances, which can be far greater in cost compared to the prices of policy premiums.

Additionally, there are a number of other risks involved with owning property and becoming a landlord that you need to consider. To reduce the effects of such risks, certain cover can also be taken out.

So what type of insurance cover can landlords get?

Flooded UK Road

Buildings insurance is the first obvious choice because you can’t guess when a disaster might occur that destroys your property and leaves you with a bill for structural repairs i.e. bricks and mortar reparation. Floods, fires, and riots are just some examples of the incidents that could cause damage.

Make sure that the cover you get is for buy-to-let properties and not for regular homeowners because although many insurers will accept payment for the policy, problems will arise when making a claim and you won’t be compensated.

Contents insurance is the second popular type of cover you might need. If you’re renting out a furnished or part-furnished property then protecting the assets you’ve provided tenants with from damage, theft or loss is essential.

Be sure to inform your renters that their property is not protected under the landlord’s contents insurance policy and advise them on taking out their own cover if they want to insure their belongings.

Rent guarantee insurance ensures that you will receive income in the eventuality that you can’t receive rent payment from your tenants. Whether they have run off without paying or they’ve fallen behind on payments, this covers you for up to 6 months of rent or £10,000 worth – whatever one is lesser.

Unfortunately some tenants are unreliable and will miss their payments, which might seem bad to them but in reality the risk of no guaranteed income can be detrimental to a landlord’s profitability, which is where rent guarantee cover can be beneficial.

Public liability insurance protects you if a tenant or any other person on your property makes a claim against you for injury or damage to their property, as a result of your negligence. For example, if you’ve failed to maintain aspects of your property for whatever reason and they have been identified as the cause of the damage, you could be held liable as the property owner.

Good liability insurance is therefore recommended in case you are sued for compensation by a tenant claim that you could be liable for.

Cover for legal expenses is worth taking out in the event that disputes arise between tenants and you, which require legal services – an often expensive requirement when pursuing a dispute or defending yourself.

Lastly, home emergency cover is available to landlords who want a 24-hour service on hand for when accidental emergencies occur, such as plumbing problems, lockouts or lost keys, and other scenarios that require immediate action.

It gives you and your tenants peace of mind and assurance that an emergency issue can be resolved by calling the assistance line you’re provided with by your insurer.

There are plenty of cover options for landlords to choose from, all of which can combine to form a comprehensive policy and protect your property.

The total cost of your policy will vary based on the type of let you intend to cover, the type of tenants who will be renting, level of cover, and a number of other factors. It is recommended that you use insurance comparison companies in order to find the best deal on landlord insurance.

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Steve Smith

Director at Ashburnham Insurance Services Ltd, providing professional, expert assistance to buy-to-let property investors and landlords in the UK seeking comprehensive cover.

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