Insurance can be confusing and landlord insurance cover is no exception – how do you work out which is the best landlord insurance cover for your needs? In our guide, we give you an overview of the different features of landlord insurance so you can identify the best landlord insurance cover for you.
Do I need landlord insurance?
Landlord insurance is not a legal requirement, but a conventional home insurance policy won’t cover you for the higher risks associated with buy to let such as loss of rent.
If you let to tenants without dedicated landlord insurance, you could find yourself out of pocket if your property is left uninhabitable by tenants. Also, mortgage lenders usually ask landlords to take out a specialist landlord insurance policy.
So, if you have a mortgage on your rental property, it’s important to check the terms of the agreement before you let your property.
What does landlord insurance cover you for?
Landlord insurance offers specialist cover for your rental property. It protects the landlord against financial losses and risks connected to letting a property. This includes things like fire, theft and weather damage, but also includes cover for landlords’ legal liabilities in the event that an injury or loss is suffered by a tenant because of a fault with the buy to let property, or as a result of rental activity.
Different types of landlord insurance cover different risks. A policy could cover things like damage to the building, loss of rent and claims made against you if someone is injured.
Most landlord insurance policies include building insurance and property owners’ liability insurance as standard.
What is the best landlord insurance cover?
The best landlord insurance cover for you is much like many other insurance policies you might have come across. A range of different cover options are often offered under one policy. Sometimes, the basics are included as standard, but if you take additional cover options that are not included as standard, for example malicious damage by tenants or their guests, you will usually incur extra costs.
As a property owner, you are more likely to need some of these cover options than others; it is a case of weighing up the risks and making an informed decision. But how do you decide which options you are most likely to need? Here, we give you a rundown of the options you are most likely to come across so that you can decide what’s best for you.
What is the best landlord insurance cover for you?
Standard buildings insurance covers structural damage to the building caused by fire, flood and storm damage. As with home insurance policies, a mortgage lender will insist that building insurance cover is in place before finalising a loan.
When it comes to landlord building insurance, landlord insurance policies differ dramatically as to what is included as standard, so it’s sensible to shop around. Some, like Hamilton Fraser Total Landlord Insurance’s Premier policy, will include theft, accidental damage or malicious damage by tenants and their guests as part of the package.
Others will often exclude damage caused by tenants or persons legally on the premises, or offer these benefits at extra cost. When weighing up the risks, it is worth remembering that, as a landlord, you are ultimately handing over your most expensive asset to a stranger. Knowing you are covered for damage, be it by theft, accident or malice, is likely to bring you peace of mind.
Other areas to look out for under landlords’ buildings insurance are whether the policy offers cover between tenancies and if so for how long. Some policies will restrict their cover after 30 days for an unoccupied property.
Hamilton Fraser Total Landlord Insurance’s Premier policy offers full cover between tenancies for up to 90 days as standard. This kind of benefit could make you considerable savings further down the line if your property is vacant for a period between tenancies, for example if you have a student property.
Time spent checking precisely which covers are included under your buildings insurance when you are taking out a landlord insurance policy is likely to save you money in the future – if you have to pay more for extra covers, your total premium is likely to escalate and if you need the extra covers but don’t have them, then you will most certainly end up out of pocket.
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When it comes to contents insurance, it is important to note that your landlord contents insurance cover shouldn’t be confused with that of your tenant. Your tenant is responsible for the cover of their own possessions and to be on the safe side this should be clarified with the tenant.
If you let your property as “furnished”, your contents limit will inevitably be higher than if you let it “unfurnished.”
This cover is not an essential, but basic contents insurance should cover accidental damage to glass and sanitary fittings as these would be expensive to replace.
A more comprehensive, all-inclusive contents cover, will include malicious damage, theft and extend to gardening equipment.
With more basic policies these will be added extras, incurring extra costs.