Understanding insurance for landlords
When renting out a property you need to be aware that you will require specialist landlord insurance. General home insurance isn’t right for you as it doesn’t cover all third party risks that you may encounter by having tenants.
Here’s a quick look from landlord insurance providers Endsleigh at the different options available to you.
Landlords specialist buildings Insurance
Your mortgage provider will require you to purchase specialist landlord buildings insurance for your rental property.
As standard buildings insurance generally covers your property against loss or damage caused by:
- Fire or smoke
- Theft, vandalism or civil commotion
- Oil or water leakage and burst pipes
- Lightning, storm or earthquake
- Subsidence
- Damage caused by vehicles, falling trees, animals, aircraft, aerials and masts
In the case of complete destruction of your property, buildings insurance also covers full replacement or repair costs as well as the cost of clearing the area.
As well as covering all of the above, a landlord’s building insurance policy differs from a standard home insurance policy when it comes to cover elements that relate to tenants living in the property such as:
- If your tenants can’t stay at the property as a result of damage or a buildings claim. In this case specialist landlords insurance will provide temporary accommodation cover for your tenants and in some cases, provide an element of loss of rent cover to protect your rental income
- If your tenants or their guests cause malicious damage to your property a specialist landlord policy would cover the damage caused
- Probably the most important of them all, if you don’t have specialist landlord buildings insurance policy in place and need to make a claim, your insurance could be invalidated and declined
Landlords contents insurance
Landlords don’t normally need full contents cover for their rental property, unless the property is let fully furnished. However you may want to give yourself some protection for the things you do provide.
You can usually choose the level of cover that suits your rental property to protect your items against fire and theft. Landlord’s contents cover includes furniture, household utensils, kitchen electrical equipment and soft furnishings, including carpets and curtains – basically anything that could be removed from the property. You can often extend the cover to include accidental damage too, a popular addition for landlords.
Home Emergency cover
Home Emergency cover can be a really useful addition to your let buildings or contents policy. This cover protects you and your tenants against the loss of essential services in the property, 24 hours a day.
What does that mean?
Well, Home Emergency usually covers call out and labour charges for contractors to come and make urgent repairs, as well as covering the cost of providing/replacing parts and materials (there is often a maximum value applied). An ‘emergency’ is usually in connection with:
- Plumbing and heating system problems
- Security of doors and windows
- Roofing problems
- Drains and sewer blockages
- Down pipes and guttering
- Electricity supply problems
- Lost keys
Home Emergency cover can be very useful for landlords who perhaps don’t use a Letting Agent or live near their rental property. This cover removes the hassle of having to personally deal with an emergency. Home Emergency insurance can be added to a basic policy at an additional premium.
Rent Guarantee insurance
Economic times have led to more and more landlords needing to protect their rental property investment and their income more than ever before. Even the best tenants can find their circumstances changing, resulting in them being unable to meet their rental commitments.
Having a rent guarantee policy in place can protect you from being out of pocket by helping you recover rent arrears. Legal cover is often provided as standard as well, giving you access to a panel of solicitors to provide help and advice on legal matters, not limited to letting a property.
