Landlord Insurance in the UK

Having long-term investments is a smart way of having your money work for you. In addition, it is a suitable approach of securing your future and that of your dependents. Owning rental properties is an example of a viable long-term investment. While it is a reliable source of income, the reality is that certain incidents or accidents may transform the venture into a liability.

To protect yourself from the resultant losses, it is important to purchase an apt landlord insurance. In order to save costs you may also want to use a good comparison of costs and benefits, e.g. via Comparethemarket.com.

Must I Have a Landlord Insurance?

If you are renting out your property, you are not legally obliged to have a landlord insurance. However, the policy is helpful and crucial since the ordinary home insurance cover does not protect you from incidents or accidents that may happen to a rented out structure. Additionally, it is common for a mortgage lender to list this as a requirement before you can take in tenants. There are various scenarios that people should consider a landlord insurance policy. These setups include:

  • Renting the property out to family members or friends. Whether you are renting out your property to a familiar party or a complete stranger, you will need a landlord insurance cover in addition to the usual home insurance policy. It is also important to note that for this special cover to be considered valid, you have to have a legal written agreement with the occupant. For personal reasons, you can choose not to have a cover that focuses on legal expenses or tenant default. However, it is crucial to purchase a policy that provides general protection such as a buildings insurance or one related to property owners’ liability.
  • Landlord insurance versus homeowner insurance. If you have a landlord insurance, there is no need to purchase a homeowner cover. This is because a landlord insurance is a form of homeowner insurance that protects you from different rental-related incidences. It often protects you from more risks compared to the ordinary homeowner policy.
  • Being a resident landlord. even if you decide to rent out a section of your property while still living within the compound, a cover tailored for the building and its contents may not protect you from all renting-related incidents. As such, a landlord insurance policy is necessary. The UK’s Ministry of Housing, Communities & Local Government has a legal guidethat is helpful in such scenarios.
  • If you already have a buildings insurance. It is crucial to check with your insurance provider if you can alter your current buildings insurance cover to include rental-related elements such as tenant default, rental protection, and property owners’ liability. If not, it will be helpful to take a landlord insurance.
  • Having lodgers. even if you are just renting out one room as opposed to the entire property, an ordinary home insurance may not protect you comprehensively. This is founded on the fact that a typical home insurance only covers the policy holder and the family members residing in the house. If the insurer cannot modify the current policy to include the lodger, it is advisable to take a landlord insurance.

 

How Much Does a Landlord Insurance Cost

Like any other policy, there is no constant price for a landlord insurance. The cost of the cover depends on the size of property that you intend to insure as well as the type of cover you desire. Please note that a cheap insurance policy may not always be the right one for you. To select the landlord insurance that best suits your interest, compare different deals and evaluate the extent of each cover before making a decision.

Types of Insurance Policies for Landlords

As a landlord, different insurance covers will protect you from specific risks. As such, it is important to evaluate the provisions of the deal presented by an insurer before signing the papers. Some of the covers that are ideal for a landlord include:

  • Landlord buildings insurance. This policy protects you against calamities that may befall the property including vandalism, floods, or fire. However, it is crucial to note that this policy covers the structure itself - floors and walls- but not its contents.
  • Landlord contents insurance. It protects assets such as furniture and other house accessories from damage or theft. However, this provision does not include the usual wear and tear that takes place during the period of tenancy. You should also advise your tenants to take care of their assets as the policy does not include their belongings.
  • Landlord liability insurance. This policy covers you in the event of compensation claims following damage or injury on a tenant or another party. The causal aspect on the property could be anything from faulty electric connection to a falling tree. With this policy, the legal expenses and sum of the claim are covered.
  • Legal expenses insurance. The legal costs included in this cover include the costs of evicting a tenant and the any ensuing court expenses. With this policy, you can also acquire the services of a property law professional.
  • Tenant default insurance. The policy covers you if the tenant fails to honor the rent agreement for two consecutive months. In such a situation, you can get reimbursed for up to 8 months’ rent. Nonetheless, ensure that you conduct adequate referencing and credit evaluations before getting into the landlord-tenant agreement to be on the safe side.
  • Loss of rent insurance. With this type of policy, you will be reimbursed in case you are unable to rent out your property due to calamities that you are insured against including floods or fire.
  • Alternative accommodation insurance. In the event where you are obliged by your tenancy agreement to avail alternative accommodation if your property is rendered uninhabitable, this cover will come in handy. Just like the loss of rent insurance, this policy only protects you against insured aspects such as flood or fire.
  • Accidental damage insurance. Depending on the terms of your policy, it can protect you against unforeseen events such as a DIY project gone bad or a broken window. However, it does not protect you from the usual wear and tear as well as a shoddy job executed by your contractor.
  • Landlord home emergency insurance. With this cover, you can get assistance at any time in the event of issues related to drainage, plumbing, power, heating, or security systems. It could also cover you in case you are obliged to avail alternative accommodation to the tenant for a while.
  • Unoccupied property insurance. There may be instances when your rental property is unoccupied. In such a scenario, an unoccupied property insurance will come in handy. To remain covered, ensure that you conduct the necessary checks regularly.

what is landlord insurance

Landlord Insurance Providers

In the UK, there are several insurance companies that offer landlord insurance. To purchase a cover that best suits you, it is important to compare the provisions of different insurers. Some of the competent entities include:

Conclusion

While rental properties are a viable source of income, they can subject you to hefty losses in the event of structural damage, defaulting tenant, or unoccupied spaces. To protect yourself against such risks, it is essential to purchase a landlord insurance. Evaluate and compare the provisions from different insurers to identify the cover that suits you the best.