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Landlord insurance: What does it cover?

Landlord insurance: What does it cover?

There are many important things to implement as a landlord.

Staying compliant means ensuring your property and your affairs are in line with huge amounts of legislation.

And while landlord insurance is not a legal requirement like so many other aspects of renting out a property, you would be foolish not to have it in place to protect your interests.

Moreover, many mortgage lenders insist on it.


What is landlord insurance?


Landlord home insurance is not the basic buildings and contents policy you’re probably used to for the property you live in.

And knowing what landlord insurance you need can be confusing.

While landlord insurance covers the buildings insurance element you’re used to, meaning your property is protected against major damage or destruction, landlord policies also cover a raft of other eventualities, too.


What does landlord insurance cover?

As we mentioned above, a landlord insurance policy will cover your rental property against major damage or destruction, by fire or flooding for example.

But there are other, increased cover options for you to consider, too.


Landlord contents insurance

If you’re offering your rental property furnished, then having a good contents insurance policy in place should be on your mind.

Landlord contents insurance will cover you against damage or theft of items belonging to you, but if your property is let unfurnished, it is your tenant’s decision on whether they wish to cover their own items.


Tenant default insurance

A tenant failing to pay rent, unfortunately, is a hazard of the landlord occupation from time-to-time.

Of course, there is action you can take via a section 8 eviction, but recouping costs and the sheer amount of time spent on doing so can take its toll.

Tenant default insurance will cover that lost rent for a period of time while you take steps to resolve the situation.


Property owners’ liability insurance

Even if you consider yourself well on top of your rental property’s routine maintenance and regular inspections are carried out, it only takes that tiny bit of carpet or laminate flooring sticking up to cause an injury.

And if that injury is to your tenant or a visitor to the property, you could be looking at a hugely damaging compensation claim.

Property owners’ liability insurance should cover your legal costs and any compensation claim and really is worth considering.

Because you just never know, do you…


What landlord insurance do I need?

If your rental property, or properties, are mortgaged then there’s a strong chance you’ll need at least a buildings insurance policy.

Most lenders insist on it.

The amount of cover you need should be based on the projected rebuild cost of your property should it be destroyed, which will include labour and material costs.

Most importantly, if you’re renting out the property you live in don’t assume your current buildings insurance policy will cover you.

It won’t.

You’ll need to update your policy to cover your home as a rental property, or seek out a new deal with another insurer.

Whether you need contents insurance will depend on whether your property, or properties, are let furnished and, if they, are, how much value you place on the items included.

Other landlord insurance policies, like tenant default cover or property owners’ liability insurance are really down to you as an individual.


How much does landlord insurance cost?

The cost of your policy will depend on your property, its value and the tenants you have living there, not to mention the amount of cover you require.

Insurers work out premiums on the likelihood that you’ll make a claim and the potential cost of any claim, so the costs to you as a landlord are very dependent on your individual circumstances.