Landlord insurance is a policy that covers landlords, the property and the tenants involved with a rental property. As a landlord, you are renting out your own property for the use of someone else, therefore, you cannot guarantee a damage free, well-kept property and it’s your business and income that may be at risk if the worst it to occur.
A common misconception among landlords is that conventional home insurance will cover you against damage when you rent your property out, but because there is rental activity in the property, conventional insurance does not cover it.
Taking out landlord insurance is incredibly important, even if you have the most respectful tenants, they are only human and things will inevitably go wrong. Landlord insurance is not seen as one particular product, it’s normally a number of different types of insurance that would be suitable and because you are covering yourself, a property and tenants, there is quite a lot to think about.
Some Landlord insurance types to consider:
Perhaps the most basic type of landlord insurance to have to hand, but is one that is strongly advised if you take out a buy to let mortgage. Building insurance will cover damage from natural causes, such as earthquakes and flooding, but will also cover more rare instances of disaster such as subsidence.
When renting out a property, building insurance could also cover any damages that a tenant intended to do maliciously – not something you want to think about but it does happen occasionally and it’s better to be protected.
Building insurance can sometimes offer loss of rent insurance as part of the package. This means you are covered if the property is damaged to the extent where a tenant can no longer live in it and therefore, you as the landlord will not receive any income from the property.
Landlord contents insurance
You hear of contents insurance a lot and as a landlord, you may assume you don’t need it for the properties you rent out. However, should the property be furnished with your belongings, taking out contents insurance is advised. This way, if a tenant damages any of your furniture or belongings, you will be covered by the policy.
Landlord contents insurance is subjective and so is the amount that is charged for it. The amount you pay depends on factors such as where the property is situated and the type of tenants living in the property. For example, contents insurance for student tenants is typically higher than tenants in a professional job role.
Landlord emergency cover
If a problem such as a broken boiler or a broken door lock occurs, with emergency cover, tenants in a rented property can be looked after by someone who can fix the issue as soon as possible and if the issue isn’t fixable, then the policy should cover the cost of replacement accommodation for the tenants.
Taking out landlord insurance is not a legal requirement, but for most landlords, renting out properties is a business, therefore, there is income at risk if something does go wrong.