The Lowdown on Landlord Insurance

Landlord insurance is designed to cover the specific risks faced when renting buy-to-let property. There are different types of cover that address the various types and levels of risks. It’s important as a landlord to know what’s available in terms of insurance, and to ensure you know what you are, and more importantly what you are not, covered for.

When you let property, there are various risks you will face, which makes landlord insurance a very important investment. Most policies include buildings insurance and property owner’s liability cover, but there are numerous other add-ons, such as rent guarantee insurance, accidental damage and fixtures and fittings cover.

Is there contents insurance for landlords?

You can purchase landlord contents insurance, and this will cover any appliances and furniture you supply as part of the rental for flood, fire or theft. What isn’t covered is tenants’ belongings. They’ll need to arrange their own cover for those. Always ensure you calculate the correct value for insurance purposes. Under-insurance means you won’t be paid out enough to replace the item, whereas over-insurance will see you paying over the odds for your premium.

What does landlord buildings insurance cover?

Buildings insurance covers the fabric of the property against risks such as flood, fire or vandalism. The cover will meet the costs of repairing or rebuilding the property as required. Again it is vital to ensure you set the correct rebuild figure so you have sufficient cover in place. If you own a flat, then it will be down to the freeholder to arrange and pay for the buildings insurance, but you may wish to take out your own fixtures and fittings cover.

Would I be covered for tenant damage through my landlord insurance?

If you take out accidental damage insurance then you will be covered for the replacement or repair of your property should a tenant cause damage to it. This cover is limited only to accidental damage. If the damage is malicious, then you won’t be able to make a claim. It can actually be difficult to find cover for malicious damage, although there are a handful of very specialist policies that may be suitable.

Is tenant injury covered by landlord insurance?

Landlord liability insurance is usually a core part of any landlord insurance policy. It provides cover for compensation claims and legal fees should a tenant or anyone visiting your rental property suffer an injury for which you are deemed responsible.

What about the legal costs of evicting a tenant?

If you need to evict tenants, there will be legal fees involved. Some landlord insurance policies will take care of a proportion of these costs, providing you have legal expenses cover. There will be limits and conditions for this type of cover, so be sure to check the small print.

Does landlord insurance cover unpaid rent?

There are loss of rent options that you can add to a landlord insurance policy, but it is important to take note of precisely what they cover you for. Some will only pay your rent if the tenants have been forced to move out of the property following a disaster such as a flood or fire, and then only if such an event is covered by your landlords buildings insurance.

If you are looking for insurance that covers the rent when the tenants fail to pay, then you will need tenant default insurance, which is a specialist type of cover. There will usually be conditions associated with such cover. Sometimes for example, you will have to wait until your tenants have got behind with their rental payments by a month, and then the insurance will pay the rent after that for a fixed period, usually 6-12 months.

There are normally limits to the cover too, and there could be various other conditions, exclusions and an excess to pay, so be sure to check the finer detail. If you take on tenants for example who have a history of defaulting on their rent, then you may not even be able to obtain this type of cover.

How to guarantee your rental payments?

If you are looking for assurance that rent will be paid every month, a rent guarantee scheme is probably more appropriate for you. With the homes2let guaranteed rent scheme for example, your rent will be paid regardless of whether the tenants are paying, and even when the property is empty.

You won’t have to make a claim or pay any excess, and you’ll even have a host of helpful things thrown in, such as tenant sourcing and referencing, property repairs and maintenance, inventory checks and mid-term inspections, and legal costs.

To discover how the homes2let guaranteed rent scheme works, and how the team at homes2let can save you valuable time and money, and reduce your risk, we welcome you to get in touch.