20 October, 2016
There are plenty of things to consider when renting out a property, but landlord insurance is one of the most important. Unfortunately, it’s also one of the most commonly overlooked – that’s why we’ve put together this guide. In it, we’ll explain the concept and highlight the reasons for arranging your own policy.
What is landlord insurance?
Let’s start with the basics.
Landlord insurance is a type of insurance policy that covers people against financial loss relating to rental property. The term is used pretty broadly, however, and the type of protection on offer will vary between different providers and products.
Although many of the features of standard home insurance are included in landlord insurance – including cover against theft, fire and flood damage - it’s not enough for landlords to just have the former. Specialist cover is essential.
As well as these basics, landlord insurance also covers against any damage to the property caused by tenants – accidental or otherwise. Say, for example, a window pane is cracked and needs replacing, you won’t be left out of pocket.
Other common inclusions are:
- Loss of rent protection – to cover your rental income in the aftermath of an insured event at the property, including floods and fires
- Building cover – this protects against the cost of repairing structural damage
- Lock replacement - in case all existing keys are lost or the locks need to be changed in an emergency
Public liability cover
Some providers include public liability cover within their standard landlord insurance policies, while others will require you to pay extra. Either way, it’s important.
As a landlord, you’re responsible for ensuring your tenants are as safe as possible while in your property. Accidents happen, though, and when something does go wrong, you’ll want to be covered.
Public liability cover protects you against any personal injury claims made by your tenants, and often those made by guests and service professionals who visit the property as well. This could be anyone from a friend to a mobile hairdresser.
In most cases, the protection will cover you for any damages awarded, as well as your legal costs and even the claimant’s legal costs if you’re found to be at fault.
Why landlord insurance is essential
Legally, you don’t need landlord insurance, but you may find that your mortgage agreement demands that you have it, so be sure to check this with your provider. Even if not, though, the benefits certainly outweigh the cost.
While most tenancies go without a hitch, there are so many things that can go wrong. And, if they do, you’ll want to be prepared. With the right policy in place, you’ll be able to focus on the welfare of your property and its tenants when something happens, instead of worrying about financial loss.
Landlord insurance helps to ensure your buy-to-let investment remains fruitful, even when things don’t quite go to plan. And, with some great deals available, the cost of arranging cover needn’t even be too noticeable. Just be sure to shop around and find the inclusions you need.