If you are looking for tips to compare landlord insurance easily than this article will help, but you need to appreciate that there is no legal requirement for having insurance.
Also, it’s important to appreciate that a normal household insurance policy will not cover a home that is being let to tenants.
It’s for this reason why you really should look at a dedicated landlord insurance product that will meet all of your needs – you may find that with standard home insurance that the provider may refuse to pay out on any claim being made if they discover that tenants living in the property.
The other issue to bear in mind, is if you have a mortgage on the rental property, then the lender may insist that there is a valid landlord insurance policy in place before tenants move in.
So, understanding that a specific landlords insurance policy will be necessary, this article will highlight what type and level of cover you need as you compare one product with another.
It’s not always easy to do and one of the issues is that with specialist landlord cover you should look for protection against tenant damage and also for any potential rehousing costs.
Why do you need landlord’s insurance?
Essentially, the question of why do you need landlord’s insurance is that it will help to bring peace of mind.
Having the correct insurance in place will ensure that your rental property investment is protected, even when tenants are not living there.
This then brings us to the issue of what does landlord’s buildings insurance cover?
These products offer insurance that will cover up to a certain sum to insure the building’s structure, plus any fittings and fixtures should they be damaged in an accident, fire, or even in a flood or storm.
It may also come as a surprise that, according to Moneysupermarket.com just 82% of landlords will request accidental damage cover for their property, meaning 18% don’t so they leave themselves open to either claiming any repair costs from tenants or forking out themselves.
Should a landlord buy contents insurance?
We have seen that it’s a good idea to have buildings covered by insurance, but what about the contents of your buy to let investment?
If you are letting a furnished property to a tenant then contents insurance will be a good idea.
While most insurance policies aimed at landlords will include contents insurance, some may ask that you selected it as an additional coverage.
Also contents insurance is a good idea for an unfurnished property since the contents cover will provide protection against white goods, carpets and curtains, for example.
You may find it surprising but according to CIA Insurance data, just 25% of landlords will request a contents policy when buying landlord’s insurance.
It’s important to appreciate that any contents in a property that belong to the tenant will need to be covered by their own insurance policy.
What else will landlord insurance cover?
Most landlords insurance cover is fairly comprehensive, but there are some things that you should check to ensure that cover is in place without having to pay extra. These include:
- Loss of rent
This is a contentious issue for landlords and having insurance cover against any loss of rent should the property become uninhabitable if there is a flood or fire, which means the tenants will need to be moved out, means your rental income will be covered – and you can pay your mortgage.
Always check the small print for any loss of landlord’s rent coverage to ensure that the amount that is paid out will cover your monthly mortgage costs. Also, some policies will also pay for the tenant’s alternative accommodation while repair work is carried out.
- Malicious damage
It’s a sad fact of a landlord’s life that a tenant may inflict malicious damage on your property. This intentional damage to the contents or building, for example, having items stolen or windows smashed means your insurance will pay out.
However, if you believe that the damage to your buy to let property was carried out with malicious intent, then you must report this to the police because the insurer may ask for a criminal case number.
- Landlords liabilities
One of the overlooked issues with a rental property occurs when a tenant may be injured while living in the property. For example, they may trip over a broken floor tile or be injured by an exposed wire so they could then sue you for damages.
Also, should a tenant’s personal property be damages while they live in your home, then they could make a claim, as could someone carrying out repair work who becomes involved in an accident on the property.
It doesn’t need to be spelt out that these types of claims can be very expensive to meet and a standard landlord insurance policy will offer, usually, liability cover of up to £2 million should you end up in court.
- Void periods
We have mentioned the prospect of not being paid rent when the property is empty and if you cannot find a new tenant, then this is known as a void period. Some landlord insurance products will offer cover for those rental homes that are unoccupied for 90 days and if it’s a student property, then potentially up to 120 days.
Landlord insurance coverage issues when comparing products
Those are the main landlord insurance coverage issues that you should consider when comparing products between insurers – so don’t just opt for the cheapest one!
You’ll need to spend time considering what type of insurance cover will best meet your needs, including the options such as having rent guarantee insurance and home emergency cover.
Some landlords also like to have key care insurance and others would like the same insurer to cover several rental properties.
Whatever your needs are, it’s important that you compare landlord insurance products to ensure you get the one that best meets your needs and a range of potential situations.
