If you own a property that you let out, either to private tenants or on a commercial basis, this type of insurance may be useful. It is not the same as standard home insurance because it comes with many other features, and it is something you should consider if you want to protect your investment.
If you have a mortgage on your property, then you will be legally obliged under the terms of your contract with your lender to have adequate buildings insurance in place.
Why you may need landlord insurance
Some people wrongly assume that a standard home insurance policy is all they need when they are letting out a property. However, a landlord policy will provide far more protection in a number of different situations to protect your investment and your business.
Anything can happen when you let a property to tenants, and it is important to cover yourself for any eventuality to avoid unnecessary financial problems should something go wrong.
If you do let your property and don’t have the correct insurance cover, then any claim under your existing cover may be rejected.
What does it cover?
Landlord insurance can cover many things, but it is important to remember that the following things are only examples of typical areas that are covered, and that every policy is different;
- buildings cover is one of the most important things that is covered on most policies. This provides you with cover should your property suffer damage from flooding, fire or storms, and cover is usually provided up to the rebuild value;
- contents cover can be included, if required, and the amount of cover you need depends on the contents that you keep in the property;
- subsidence is something that may or may not be included as standard within a policy, depending on the provider;
- public liability and employers’ liability may be included, so that you are covered for anyone you employ (like a cleaner) or should a member of the public become injured due to a problem with your property;
- malicious damage by tenants may be included, and this covers any damage that the tenants cause to your property so you do not have to pay the repair bill, typically, for residential properties, up to £5,000;
- loss of rent from insured perils, which provides financial assistance should you lose rent because you cannot let the property out due to problem like a fire or flood;
- if you own a commercial property, you may get higher levels of cover to provide protection for things like expensive mechanical equipment.
Things to look out for
You should remember that all policies are different and that one landlord insurance policy may provide all or just a few of the above things. You should therefore make sure you find one that has the level of cover you need for your own situation.
If your property may remain unoccupied for a period of time, perhaps as you search for tenants or carry out renovations, you may need unoccupied property cover in place, and this is sold separately.
There will often be limits on various types of insured events, and you should be aware of these. For example, if you have cover for malicious damage by tenants, this may only provide up to a few thousand pounds of cover, depending on the policy.
Let your properties with peace of mind
Landlord insurance is something that all landlords should consider. There are many policies available and each one is different, so look around to find one that is suitable for your needs. Once you have insurance in place, you will know that your investment is protected, giving you greater peace of mind.