Landlord insurance, as the name suggests, is an insurance cover specifically designed to provide financial assistance when unforeseen circumstances arise which you might  face as a landlord. Here we discuss why landlord insurance is a must have policy for anyone who owns a buy-to-let property.

What does landlord insurance cover

As a landlord you will require cover for situations that are not covered in a conventional home insurance policy, such as unintentional damages to your property by tenants, injuries to your tenants while in the property and loss of rental income.

Let’s look at some of the types of landlord insurance that will ensure protection of your investment. Some of these may be “lender dependent”, meaning they might include it as a part of the standard landlord insurance, while some others may have to be purchased as an add on.

Building and contents insurance

Like home insurance, landlord building insurance covers your property for structural damage and is provided in a standard landlord insurance cover. If you also include furniture and appliances in your rental home, you may choose to add on a content insurance cover. The Contents Insurance is essentially for your building and the contents within it as well. And will ensure financial support in the event of theft, vandalism, storms, and fire.

Landlord liability insurance

As a landlord you will be responsible for any accidents that occur within the home caused due to a fault in your property. If your tenant decides to sue in any of these cases, landlord liability insurance will cover you for any hefty legal costs.

Rent guarantee insurance

There could be times when your tenants are unable to keep up with the rental payments. If your rental property is your main source of income, this could be a challenging time for you, especially if you are in the process of carrying out your mortgage payments. To avoid this risk, you can include rent guarantee insurance cover which will provide you with part of the rental income during this difficult time. Rental Guarantee Insurance also includes cover for legal expenses if you should need to evict your tenants and repossess your home.

Unoccupied property insurance

Unlike a standard home, a rental property may go unoccupied for an extended period of time when you’re in between tenants. In this case your property will ideally need a cover for damages that may occur during its period of inoccupancy. This could be anything from damages to the building, its contents and or even accidents that happen on your property during this time.

Landlord emergency cover

Emergencies at your property could occur at any time. Breakages or issues in its plumbing, roof, drains, pipes, doors, windows, heating, electricity can make the property inhabitable and even risky for your tenants. You will then need to remedy the situation immediately. This cover helps you to manage the cost of repairs and make the property available for safe occupancy as soon as possible.

Do you need landlord insurance if you have home insurance?

Home insurance and landlord insurance in the UK both provide buildings cover, however, they do have their own unique protection schemes.

Landlord Insurance (also known as buy-to-let), helps you get through any damaged  caused to the property by the tenant, be it intentional or not. This type of policy is flexible and offers add-ons that can extend to protecting the internal fittings of the property as well as damage caused by natural disasters such as storms or floods.

Home insurance on the other hand is to do with the place you live in and not let out to tenants. Similar to Landlord insurance, but home insurance is carried out on your own residence. It does however offer protection for natural disasters and theft. Contents Insurance is also usually a part of home insurance enabling financial returns for any movable items that could be damaged within the property.

If you are renting out a property to tenants, yes you do need to have a Landlord Insurance scheme particularly if you are looking at obtaining a buy-to-let mortgage. Lenders will insist on it.

Conclusion

Landlord insurance goes beyond traditional homeowner's insurance by addressing the unique risks associated with renting your property. Unlike your own home, you won't have constant access to the property and may face a higher risk of damage due to wear and tear by tenants as well as other factors.

Landlord policies are designed for this specific situation, offering coverage for a wider range of potential issues. This can include damage to the building itself, your own contents left within the property, and even liability for accidents that occur while someone else is living there.

 * Approved by The Openwork Partnership on 14.05.2024