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Guide to landlord insurance

As a UK landlord renting out property, it is important to take out a suitable insurance policy to protect your investment in the event that something goes wrong.

For buy-to-let investors, domestic home insurance isn’t suitable as there are more risks to landlords than homeowners. For example, if there was a flood, the landlord would not only be responsible for paying for repairs, but also for housing the tenants.

It may seem pessimistic but there is plenty that can go wrong when letting out your property, and so it makes financial sense to mitigate the risks you can identify.

What Is Landlord Insurance?

Unlike traditional buildings or contents insurance, landlord’s insurance is designed to protect against all the potential risks that letting out a property can have.

It is similar to the home insurance policy you have for your main residence, but contains additional features that protect a buy-to-let investment.

As well as providing cover for things that a typical homeowner wouldn’t need, such as loss of rent, it also allows the property to be vacant for longer than standard home insurance, usually up to three months.

If you don’t have adequate landlord’s insurance and have taken the risk of domestic home insurance, you might find that your claim is void and the insurer refuses to pay out.

What's Covered By Landlord Insurance?

Buildings insurance

The biggest aspect of landlord’s insurance is the buildings cover. This covers the structure of the building, such as walls, windows and roof, and any fixtures and fittings, such as bathrooms and kitchens. Many lenders will insist on having appropriate buildings insurance in place as a condition of the mortgage. This cover will pay out for repairs, or in extreme cases, the cost of rebuilding the property, in the event of natural disasters, storms and flooding, theft and vandalism.

Contents insurance

It is easy to assume that contents insurance is the responsibility of the tenant, but some of it falls onto the landlord’s shoulders too. If you are letting out a furnished or part-furnished property, you will want cover for your furniture. However, even unfurnished properties should still have appropriate cover for carpets, light fittings and white goods. When choosing contents insurance, make sure you opt for new-for-old cover to ensure that you can afford to replace the damaged items.

Liability insurance

As a landlord, you have legal liabilities and with tenants becoming increasingly litigious, it is very important that you are covered in every possible event. If one of your tenants were to become injured by tripping over a broken tile or electrocuted by faulty wiring, they could sue for damages. Look for liability cover of £1-2 million as damage claims can be very expensive.

Rent guarantee insurance

Landlords that rely on their rental income to pay for the mortgage or provide an income will benefit from this insurance. It pays out in the event that a tenant hasn’t kept up to date with rent and when the property is empty between tenancies.

Loss of rent

This is similar to rent guarantee insurance, but it is different, so it’s best to look for a policy that provides both. Loss of rent applies in the event that the property is uninhabitable, perhaps because flood damage, or another reason. In this situation, you would still need to pay the mortgage and provide alternative accommodation for tenants, but these payments will be covered by the insurance.

Legal expenses cover

There are many situations where you could become involved in a legal dispute with a tenant; if they have fallen behind with their rent for example. While you might have the opportunity to recover what’s owed, the legal bills can be incredibly expensive, so it’s best to get cover. Look for policies that provide up to £100,000 cover per claim.

Home emergency cover

The last policy that you should consider adding to your landlord’s insurance is home emergency cover. This will not only help your tenants in the event of an emergency, but will prevent you from having to solve the problem yourself. While some managing agents can assist in these situations, anyone letting privately is at risk. Home emergency cover can be invaluable in the event of a broken-down boiler or burst pipe, as it will help pay for the cost of repairs and get the problem fixed as quickly as possible.

How to claim on Landlord Insurance?

Should you be in the position where you need to make a claim on your landlord’s insurance, there are some basic guidelines to follow.

Firstly, you will need to make the claim as soon as you are aware of the incident and within 30 days at most. Also, in the event of a crime, it’s essential that you contact the police immediately and obtain a Crime Reference Number.

If you are making a claim for significant sums, it’s likely that the insurer will appoint a loss adjuster to visit your home and handle your claim.

For your claim to be successful, you will need to be able to provide evidence to the insurer, such as proof of ownership, on their request.