What is Landlord Insurance?
Landlord insurance offers specialised policy options to safeguard against potential risks and liabilities that landlords may face when renting out their properties. These risks can include property damage, liability claims, and loss of rental income. Landlord insurance provides financial support to property owners to handle claims and make necessary repairs promptly, minimising any delays in restoring the property to its proper condition.
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Do I need Landlord Insurance?
While it is not a legal requirement, many landlords choose to buy specific policies to ensure they have adequate coverage to protect their property.
If you are a homeowner with a mortgage, your lender requires you to have landlord insurance with adequate building cover as a condition of the mortgage. This is to protect the value of the asset that the lender is giving a mortgage for.
What is covered in Landlord Insurance?
- Building: This covers the physical structure of the property, including walls, roof, floors and other structural components. It extends coverage up to a specified limit to repair or replace these elements in the event of damage.
- Renovations: This usually applies to anything attached to the building, as well as original fixtures and fittings, such as a fitted kitchen. The coverage helps protect the investments you've made in enhancing the property.
- Home contents: If you opt for landlord contents cover, the policy includes coverage for the landlord’s belongings in the rental property. This can include items like furniture, carpets, curtains and other fixtures and fittings.
Does not cover:
- Tenants’ property: Tenants are responsible for purchasing their own contents insurance to protect their belongings.
- Wear and tear to your buildings and contents.
- Damage due to lack of maintenance.
- Leaving the property unoccupied for 60 days or more.
- Damage by animals: You might be able to add this to your insurance as an extra, depending on your insurer.
How much does Landlord Insurance cost?
The cost of landlord insurance can vary significantly depending on several factors, with the primary factor being the estimated cost to rebuild your property. Larger and more valuable properties typically have higher rebuilding costs and larger claims, which can result in higher insurance premiums.
How much should I insure my property for?
The cost of rebuilding your home is known as the 'buildings sum insured'. Here's how to calculate the amount you should insure for:
The buildings sum insured is usually lower than the market value of your home (there is a value to the land that has to be subtracted from the home value). This is because the buildings sum insured is based on the cost of rebuild the property, whereas the market value includes the value of the land, which is not relevant for insurance purposes.
You should regularly review the rebuild amount that your home is insured for. As prices of materials and building work can increase over time, you may need to increase the amount to make sure you are sufficiently covered. In some cases, a professional survey might be needed to get an accurate estimate of rebuilding costs.
Factors to consider:
What risks does Landlord Insurance cover?
Buildings insurance can cover the cost of any structural repairs to your home if it's damaged by:
You may also consider getting an all-risk coverage, which will cover accidental damages. With it, your building is covered for mishaps, such as drilling through a pipe or unintentionally damaging the ceiling.
What kind of Add-ons can I include?
You can enhance your landlord insurance policy with optional extras to give you additional protection. These add-ons vary by insurer. Do double check your policy as some of these may be included as defaults:
Covers cost of repairing accidental damage to the structure of your property, and permanent fixtures and fittings.
Lets you claim back lost rent if your tenant doesn't pay. There are usually time limits and exclusions, so it's worth checking the policy details.
Covers the property even if it’s unoccupied for more than 60 days.
Property owner's liability
Covers any compensation claims if a tenant or third party sustains injuries on your property, or if there’s damage to their possessions.
How is it different from Tenant Insurance?
Landlord insurance is tailored to property owners, focusing on the structure of the rental property, while tenant insurance is for renters, providing coverage for their personal property and liability within the rented premises. If you are a tenant, or a landlord that has contents on the property, the tenant insurance or content insurance would be sufficient to cover the damage to these items. However, these policies almost always won't cover the building structure itself.
Contact us for policy quotation,
comparison and unbiased advice now!