When you rent out a property, in whatever capacity, you need to have the right insurance in place for both you and your tenant.
Even if you’ve got residential insurance, it won’t be enough. Renting out a property brings a whole new set of risks with it. You need to be sure that your investment is as secure and as protected as possible.
Landlords insurance covers a whole range of risks that your home insurance won’t. You run the risk of a claim rejection if you tried to claim on the residential insurance on your rental property.
So what are the main differences between Residential Building and Commercial Landlords Insurance included?
Landlord insurance covers everything your residential insurance does such as building insurance and contents. It can be tailored, though, and extended to cover tenanted property risks such as:
Re-housing Costs/Loss of Rent
This will cover if your property becomes uninhabitable due to insured events such as fire or flood damage. Your residential insurance won’t cover this. Landlords insurance can also cover non-payments by defaulting tenants. It also allows for vacant periods between tenancies.
Landlords insurance covers wilful damage caused by tenants, unlawful activities and theft. Residential insurance will only cover acts of vandalism to your property,
It’s advisable to thoroughly screen tenants before letting your property. Even so, there’s no 100% guarantee that they will treat your property with respect. Landlords insurance gives you extra peace of mind that if your tenants mistreat your property, you’re covered.
Damage caused by an accident as opposed to fire, theft or reckless conduct. Accidental damage is usually subject to a policy excess for each claim.
An endorsement refers to a variation or addition to the terms of the policy. You can ask for instance for individual lenders or other people who may have an interest in the policy to be added to this.
Escape of water
Refers to an escape of water or leakage from a fixed water tank apparatus such as washing machine or pipes, etc.
Residential insurance public liability will cover you if someone injures themselves such as a tradesman or a guest. However, it won’t cover any accidents and injuries to your tenants. Serious injuries that result from landlord negligence like loose tiles, water leaks, burst pipe, broken floorboards or ripped carpeting could result in a hefty claim from your tenant. Without the right insurance, you could end up facing crippling costs that will affect your cash flow. Read more about the Human Habitation Bill and what it means for you as a landlord.
This is the yearly update to the building declared value to reflect the economic increase and decrease of building costs in relation to the property.
The value the property will be insured for. This will form the basis of a claim. This is normally a higher amount than the building declared value to cover you for inflation.
Directors and Officer’s Liability Insurance
An insurance policy that covers and offers financial protection to the company directors, officers, and partners. It is designed to cover the cost of any claims for compensation made against the insured individual in carrying out their responsibilities.
As your rental property qualifies as a business, you’ll need the right kind of insurance for legal liabilities. This is in the event that a tenant makes a claim against you. Or for you yourself if you intend to take a tenant to court for non-payment of rent.
Landlords insurance may not be a compulsory legal requirement, but are you prepared to take the risk?
As landlords insurance specialists we can offer a tailored policy to cover all your requirements. Compare landlord insurance quote including buildings, registered office, tenant damages, malicious damage/theft and legal expenses cover for rental properties.