When you rent out a residential property you need to have the right insurance in place. For you and your tenant. It is important that you understand that this is not home insurance. Being a landlord has a completely different level of cover. Often you will find that if there is a fire or flooding home insurance would not cover your property if let out. The contents may also not be covered by a standard home policy.
There are different types of landlord insurance cover. Such as commercial landlords insurance, business insurance for a registered office and associated risks and insurance for unoccupied properties. There are various areas covered such as employer’s liability insurance and public liability insurance. It is important that you know that the buildings insurance cover you have is correct.
Renting out a property brings a new set of risks, see our article on Landlords responsibilities. You need to ensure that your investment is secure and protect it as much as possible.
Do I need landlord insurance?
Although landlord insurance is not a legal requirement, standard buildings and contents policies may not provide you with the cover you need. This could mean that your insurer refuses to pay out should you need to make a claim.
If property damage, loss of contents or a dispute with the tenant took place, you could face losing some of your income to pay the bills. Landlord insurance could give you the peace of mind if something that goes wrong.
If you have a buy to let mortgage for the property, some lenders may also specify that you must at least have landlords’ buildings insurance in place.
It is important to understand what types of landlord insurance policy you need, rather than just going for the cheapest deal. So, you know you have the right level of protection if something happens.
How much does landlord insurance cost?
The cost of landlord insurance varies depending on the type of cover you choose and the range of other factors. Some of these will be under your control and some of them will not be. The policy type and level of cover as well as the size of the property, location and any extras you choose determine the price.
How can I reduce the cost of landlord insurance?
When you are getting landlord insurance quotes there are a few things you need to think about in order to help get cheaper insurance. However, cheaper isn’t always better and you need to look at the cover you need.
Property condition plays a big part in the premium price. The higher standard your property is in, the less likely you are going to claim, this brings down your cost. Your claims history, so the lower number of claims you have made before, the less you will pay. Adding security measures around your properties, like cameras can reduce the chance you will claim. The level of cover you chose, with the higher cover levels costing more. Any extras on top could also increase the amount you pay.
It is important to remember that the cheapest policy will not always be the correct policy for you. Iinsure 365 will be able to provide you with different types of cover.
What do I need to get a quote?
It is worth having the following to hand when getting a landlord insurance quote for you. Your properties build date.
The rebuild cost of your home. If you are not sure look at our guide on how to calculate the rebuild cost.
The types of locks and last fitted.
Total cost of your personal belongings or contents you may need.
Types of tenants living in a property and the duration of the agreement.
Details and costs of any claims you may have made in the last 5 years.
What does landlord insurance cover?
If you are a landlord, standard home policy may not provide enough cover. This is where landlord insurance comes in place. Also known as buy to let insurance. It typically includes both buildings and contents insurance. Building insurance will cover you against events such as fire, flood and subsidence. Especially if you are renting out your property fully furnished. Contents insurance can protect you against you have put in there for your tenants.
When getting your landlords insurance quote, you could add the following as extras.
Cost of repairing damage in the emergency of a gas leak, burst pipe or pest infestation.
Property owner’s liability cover to meet any costs if a member of public incurs injury or damage from the property.
Loss of rent cover.
Make sure you have the right cover for yourself.
Residential Landlords Insurance and Commercial Landlords Insurance covers risks your home insurance would not. There are various levels of cover available. You should ensure that there is contents cover, fire and flooding cover. Unoccupied properties cover, employer’s liability and public liability insurance if required. It is important that you make sure that your investment is secure and protected. Also, that you do not run the risk of having a claim rejected. If you are trying to make a claim on residential insurance that is not correct for rental properties.
There are differences between residential building insurance and commercial landlords’ insurance contained in other articles.
Landlord insurance covers everything from residential insurance such as buildings insurance and contents.
Tailored and extended to cover your tenanted property and take on all the risks as follows: –
Rehousing costs/Loss of Rent/Alternative Accommodation
This type of cover comes into effect when the property becomes uninhabitable possibly due to fire or flood. It could be any such insured events even earthquake. It would enable you to make sure that you are insured for loss of rental income and alternative accommodation. If you have a standard residential policy on your building it would not cover this as they are not for commercial landlords. Landlord insurance can also be extended to cover non-payment of rent by defaulting tenants. But this is separate insurance, and you would need to speak to us on this.
Most landlords’ insurance policies have a period where the property can be vacant when having a changeover of tenancies. This can range from thirty to ninety days dependant on your policy. But thereafter it is your responsibility to make sure that the insurance company’s informed. You would then go onto a limited number of perils known as FLEA fire, lightning, earthquake, and air crash. It is important that your property is not unoccupied for any length of time. This would affect your insurance policy. You need to speak to your insurance company or we regarding your property being empty.
Malicious Damage and Theft
Landlord insurance cover often covers wilful damage caused by tenants. This could be for instance where they have left the property and stolen certain items. Such as an oven etc. It could be a boiler or anything else within the property that they may wish to take. It is important that you understand that as this is malicious damage it is not covered by every policy. But by most and you should check. Residential/home insurance would be unlikely to cover you for this or any acts of vandalism.
Accidental damage will also be in some policies. It is the cost of repairing or replacing property or contents damaged as a one-off incident. This cover will come under your landlords’ contents insurance. So, it is important that you check your level of cover. Not all Insurance Companies have this within their policy. But we can confirm whether this is the case or not. It can be a one-off by some insurance companies and you should check your policy. Accidental damage will not cover wear and tear of an item over a period. It is there for one-off events such as a tenant dropping red wine on a carpet. It will not cover the tenants own furniture or belongings within the property. They need to have their own tenants’ contents insurance.
It is important that you familiarise yourself with your policy. To understand what it includes and does not.
It is important that you understand your landlord responsibilities. You have a duty of care to your tenants. Residential insurance will not cover you for public liability. If someone injures themselves as a tradesman or a guest, then you are responsible. It is important that you have the correct cover. Landlord buildings insurance covers you for any accidents and injuries to your tenant. It can be the case that there are serious injuries because of a landlord’s negligence. Such as loose tiles, water leaks, burst pipes, broken floorboards, or ripped carpeting. Which could result in a hefty claim from your tenant. Your landlord insurance would cover you for the cost of this. An insurance company would pay them directly.
If you did not have the correct cover or the right insurance, then you could end up facing a crippling bill. That could affect your cash flow. It is not the compensation that has to be paid but all legal expenses by the tenants or contractors’ solicitors. The landlords responsibilities have increased again by the recent Human Habitation Bill that has become law. It is important that you understand your responsibilities.
Legal Expenses cover
Did you know as a landlord that your property qualifies as a business? You thus need to have the right insurance for any legal liabilities. Often landlords do not expect there to be disputes with right of ways or with neighbours. But it can be that this is covered by your landlord building insurance. If a tenant makes a claim against you as outlined above, then you would be insured for legal expenses. Not all policies cover the landlords fully. It is important that you understand what is included in your policy.
Legal expenses will not cover you for taking any tenant to court for non-payment of rent. This is a separate rent guarantee scheme that would need to be taken out and we can give you a quote for this.
Landlord Insurance protects landlords from risks associated with their rental property. It usually includes buildings and contents insurance. But it can also include specific cover as we have outlined above such a property owner’s liability, loss of rent and tenant default insurance. It is important that you have the right cover. This insurance will also cover you for the cost of repairing or rebuilding your property if the structure is damaged or destroyed. It can be extended to various optional extras such as furniture and rental payment insurance.
Do I need specific insurance?
If you have one or more rental properties, it is important to make sure that you have got the right insurance in place. A standard home insurance policy will not cover you for risks associated with renting out your property. Whilst landlord insurance is not a legal rule it is often needed by mortgage lenders.
There is no legal obligation for a landlord to take out a dedicated insurance policy. But conventional home insurance will not cover you for rental activities. If you have a mortgage on your property it is very likely that your lender will need you to take out insurance before you take on tenants. It is important to note that you will need written permission from your mortgage lender before you let the property. Failure to get this may mean that you may be breaking the terms of your mortgage.
You can choose a range of cover designed for landlords, including property owner’s liability insurance, contents insurance and buy to let buildings cover. Learn more about the difference between standard homeowner insurance and landlord insurance by reading our various articles. Do not hesitate to contact us to discuss your requirements.
We are landlord’s insurance specialists and can offer tailored policies to cover all your requirements. Compare landlord insurance with iInsure365.
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What are the factors when dealing with your insurance to try and reduce the premium?
This could be down to property condition, security measures, levels of cover and especially claims history. Many landlords do not understand that the more claims you make even if they are very small then the insurance premiums will go up. Do not always think also that just because a premium is cheaper that it gives you the quality of cover you need.
Always read your policy to make sure that you have the right type of cover.
This is critical as it is your responsibility to ensure that you have the right type of cover for your property. Why not look at our 100 plus five star google reviews here. Do not hesitate to contact us on 01273 827090 or firstname.lastname@example.org if you require any help.
Frequently asked questions.
Is landlord insurance a legal requirement?
Landlord insurance is not a legal requirement, but if the worse happens it can give you vital protection for your property investment. Many mortgage lenders make it a requirement to have building insurance when taking out a buy to let.
Can I be covered by ordinary insurance?
This type of insurance is not like when you are living in the property. It would not cover at a rented property. Regular home insurance is not designed for specific issues that landlords may have. You are living in the property with the wrong insurance you might find that they may not pay out. Your policy might not cover claims you need to make or claims against you made by tenants. You would need specific landlords’ insurance.
What type of landlord insurance do I need?
This all depends on a few factors, but you can look at the various different options such as;
Landlords building insurance.
If you own the freehold of the property, building insurance is critical. It typically provides you for loss or damage to the building itself and can provide a pay-out for the property if damaged due to fire, floor.
Landlords content insurance.
Although tenants are responsible for insuring their personal belongings, if you are renting out a furnished property you would liable for the contents of it. Also consider accidental damage as well.
Property owner liability (Commonly known as public liability insurance)
If one of your tenants has an accident in your property and considers it to be your fault it may be that they will take an action against you. Public liability will insure you for your legal defence and expenses. It will also include any damages that may be awarded. These liability claims can be very expensive.
Employers liability insurance.
This is a legal requirement if you employ anyone at your rental property, who is directly under your supervision and control. They may be a cleaner or a Gardner or even a volunteer. You will be responsible by law for arranging employers liability insurance. This covers the legal defence costs and any awards for accidental bodily injury.
Unoccupied property cover.
This might be useful if you need to make renovations to the house or the flat before you rent it. This may also be between tenancies. You should always inform us if the property is unoccupied.
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