Compare  Landlord Insurance

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  • Buy-to-let insurance
  • Buildings insurance
  • Contents insurance
  • Commercial landlord insurance
  • Landlord home emergency cover
  • Landlord boiler breakdown cover

Landlord Insurance

Landlord insurance is a path taken to protect your investment that will help ensure the revenue stream it generates can be kept intact for years into the future. This type of insurance is not mandated by the government, but if a mortgage is taken out to purchase the property, the financial institution that provides the funds will require this type of protection to be in place to secure the loan.

What is included in landlord insurance?

The standard landlord insurance policy has up to 5 different areas that are listed. Each one has a purpose to help protect the investment if the ‘just in case’ scenario occurs. These areas include the building, its contents, when accidental damage occurs, if a lawsuit is filed and if the rent is not paid. Before renewing your insurance it is advisable to compare the market to find out any current deals or offers available in the landlord insurance sector.

How is the building protected?

The rental building is protected just like a residential home is with an insurance policy. This cover is the section where a claim is made when damage occurs and repairs or even rebuilding the structure is required. Events that qualify for financial payments to make repairs or a total rebuild of the structure and its permanent fixtures include the following;

  • Fire
  • Flooding
  • Storm damage
  • Subsidence of the land

How is the building protected?

Damage caused by earthquakes, war or a terrorist act is not covered in a standard policy. These events can be covered, but they have to be added as an optional add-on to the policy.

The permanent fixtures include repairs or replacement can be boilers, HVAC units, water and gas pipes, electrical lines along with built-in appliances.

The upper limit is dependent on the cost to rebuild the structure which can be £10 million or more. As a note, this amount is to rebuild the structure, not the current market value or the amount the property was purchased for.

What is considered contents that are covered?

Contents are property that is installed or in place by the landlord to help make the property livable. These are the easily replaceable items in or on the structure or in the apartments. This cover is for if the items are damaged or stolen. These items can include the following;

  • Lighting fixtures.
  • Carpeting.
  • Door locks and the keys.
  • Furniture owned by the landlord including sofas, beds, chairs, tables, ovens, refrigerators and like items that would be in a furnished flat.
  • Washing machines and dryers that can be in a common area or each flat.

These items can be covered with old for new or reimbursement for the depreciated amount. The typical upper limit is £20,000 with more protection optional for larger buildings.

What is typically not covered is property owned by a tenant. The tenant is responsible for covering their property with insurance.

What happens when a tenant causes damage to the property?

For both malicious and accidental damage by tenants, there is accidental damage cover. This cover protects both the structure and the contents of the landlord. An example of this is if a tenant causes the bathtub to overflow and water damages the tile and possible substructure of the floor. This section of the landlord insurance policy will provide the funds for the repairs.

What is the protection against lawsuits?

Protection from lawsuits falls under the public liability cover section of the policy. This protection is in place when a lawsuit is filed by a third party and claims they have been injured or die on the property. The third party can be a member of the public or a tenant. This cover is typically up to £2 million of protection to cover any settlement and the legal costs.

What happens when there is no tenant or the tenant does not pay the rent?

Collecting the payments from renting space in a building is the business plan of a landlord. When this revenue stream is interrupted, the rent guarantee section of the standard landlord insurance policy is then evoked.

This section of the policy becomes active when the landlord notifies the insurance company that the rent was not paid. Most policies require this notification to occur within 60 days of the rent being missed or not paid. Most policies do not begin payments until 30 or 60 days after the first rental payment is missed.

Acceptable reasons for non-payment of rent in which the insurance company pays 80% of the rent to the landlord.

  • The tenant is unable to pay due to cash flow problems.
  • The tenant is evicted and no new tenant has been located.
  • If the building becomes uninhabitable due to damage to the structure.

Are there any optional add-ons that can be incorporated into a landlord insurance policy?

The most common add-on to the landlord insurance policy is employers liability insurance. This is required by UK law if there is at least one employee hired by the landlord to work at the rental building. The employees can be hired to do one or more of the following tasks.

  • Manager of the building.
  • Handyman to make repairs to the building and maintain the building equipment like boilers.
  • Landscapers that keep the grounds clean.

Legal cover is also popular. This handles the cost of solicitors, lawyers, court fees of up to £50,000 if there is a dispute between the landlord and a tenant.

Do I need landlord insurance for a flat

The main part of Landlords insurance is the building insurance. In the case of a flat you may not always be the actual freeholder. The freeholder is responsible for looking after the building and they should have buildings cover. The best advice is to check with the freeholder to make sure adequate buildings insurance is in place. In addition, you may wish to consider taking out landlords contents insurance without the building element.

Do I need landlord insurance if renting to family

Landlords insurance contains building insurance and this is a crucial element, regardless of who you are renting the property to. Whilst you may know and trust the tenants you should not relax your guard, but follow the standard protocol as if you are renting to a complete stranger. This will protect you should relations sour if the future and make it easier to deal with any issues that may arise.

How can I save money on a landlord insurance policy?

Property that is in good condition where maintenance is kept up and the open spaces are kept clean provide a positive reflection for the property. This can help lower the cost of the premiums since the risk of claims being made is reduced since the property is well maintained.

With the addition of a security system to help protect the property, the risk of theft is reduced which lower the cost of the premium. This can include security cameras and alarms.

The need for landlord insurance is required for most rental property owners to help cover the costs of operating this type of business venture. This financial cover protects against unforeseen risks that might occur so the revenue stream can continue.