What does landlord insurance cover?

If you own a property, generally it goes without saying that you’ll purchase some kind of insurance for it.

Buildings insurance protects the structure itself from the elements and will probably be a condition of your mortgage, while contents insurance covers any possessions inside.

If you rent your property to a tenant, however, you will have other risks to contend with – what if that person can’t pay the rent one month, or what if they cause damage either accidentally or intentionally?

Being a landlord carries with it other issues, compared to living in the building yourself, so it’s worth considering specialist insurance.

What does landlord insurance cover?

It’s a simple question: do I need landlord insurance? If you rent out your property, then it’s probably advisable, rather than relying on buildings and contents alone.

This will be tailored to your specific needs as a landlord, with buildings insurance included regardless. An added bonus here might be that if the property becomes inhabitable for any reason – perhaps due to damage from fire or bad weather – in addition to the repairs, alternative accommodation might be offered to your tenant.

This will depend on the insurer and the policy, but is worth asking about.

You can include contents cover as part of your landlord insurance too. This will cover anything like a sofa, dining table or white goods.

On top of this, you are likely to receive loss of rent insurance. Exactly as it describes, a claim here will ensure that the income from your property remains unaffected if the tenant stops paying, or if the property becomes uninhabitable.

Cover against accidental and malicious damage might be included, with landlord liability insurance usually as standard – this covers you against legal action from a tenant who has an accident at your property, leading to injury or even a fatality.

As a landlord, you are responsible for the tenant’s health and safety, so if they trip on a piece of loose carpet or became ill due to a damp issue, your costs will be taken care of if this is followed up in court.

If it’s deemed to be your fault, landlord liability insurance will cover any damages paid to the tenant, your legal costs and also those of the claimant.

Similarly, you may consider an insurance policy covering your costs in any other legal disputes, perhaps over damage to the property or recovering unpaid rent.

Finally, to keep you looking professional and able to respond quickly if anything happens to your property, emergency assistance will often be included.

This involves the insurer sending out a skilled tradesperson as soon as possible to repair a burst pipe, a broken boiler, to replace a window or repair a lock – affording your tenant the least possible inconvenience.

What won’t landlord insurance cover?

As big a blessing as landlord insurance can be, there are certain things it might not cover – always check the small print and discuss with your insurer any particular needs.

For example, you may need a specific policy for an HMO (Houses in Multiple Occupation), where the rooms are separate, but there are shared bathroom and kitchen areas, or if you accept DSS tenants who are unemployed or claiming benefits.

Generally, you won’t need to provide specific information on who you rent to.

Also, to make sure you remain covered in any circumstances, update the insurer when there is a change of tenant, or if there are periods of the property being empty – some may avoid paying out if it’s been vacant for more than 30 days.

How much is landlord insurance?

Like any insurance policy concerning property, the price varies according to where it’s located and the level of cover you opt for. Another factor is the rebuild value of the property – different to the market value, this is essentially the price of the materials and labour that would be needed to recreate it in the event that it’s completely destroyed.

The likelihood of a claim being made will also be considered, which different insurers calculate in different ways, so it’s always worth asking several providers for quotes, as the overall price here could vary.

In theory, if a policy includes your buildings and contents insurance, but also caters to the specific needs and risks of being a landlord on top, then you may expect it to be slightly more than the cost of the separate buildings and contents policies combined.

But ask yourself the question, what does landlord insurance cover? Now weigh up the prospect of renting your property to someone you don’t really know. It could be worth having the right protection in place.

Find out more about Landlord Insurance from MORE TH>N.

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