Landlord insurance

Landlord insurance is essential if you own a rental property. As one of the largest investments that you will make, it’s important that your property is protected. There are many different options when it comes to landlord insurance cover. In many ways, it is similar to the usual home insurance policies. It will cover the building against the usual issues including fire, lightning and explosion as well as fixtures and fittings. Before you start to look around for insurance policies, it is important to recognise the different types that are available to make sure that you get one that is a good fit for your property:

Buildings Insurance

In essence, buildings insurance does exactly what it says. It protects against the building against fire, storms damage, subsidence and a range of other insured elements which will be specific to the policy that you take out. The cover should always be taken for the reinstatement cost of the building rather than the purchase price. The reinstatement cost is the total cost of rebuilding the property if it needed to be demolished and rebuilt.

Landlord Contents Insurance

Usually, the tenant of the building would purchase their contents insurance to protect their belongings, landlords may also want to take out a contents insurance policy too, which will protect any contents that belong to the landlord from theft, fire or water damage. Landlord Contents Insurance should be considered when properties are let on a part furnished or fully furnished basis.

Communal Contents

Cover for Communal Contents is very similar to landlords contents insurance and covers items that are located in shared/ common areas which are shared with other tenants. Often applicable to blocks of flats and will cover places such as hallways and corridors.

Loss of Rent

If a claim needs to be made due to a property becoming uninhabitable, this type of policy will protect rent due from tenants until such times as the property is available to be let again. This is one of the most important elements within a landlord’s insurance policy, and it is contained within most types of insurance for landlords.

Alternative Accommodation

In the same way that loss of rent protects against loss of rental income when a property becomes uninhabitable, this also offers tenants alternative accommodation until such times as the property can be restored and lived in again. Usually, the alternative accommodation will be another rental property or a B&B.

Rental Guarantee

There will always be tenants who fail to keep up with the rental payments on their property and when this happens, it can cause serious financial problems for landlords. With this type of cover in an insurance policy, the landlord can claim if for example, the tenant defaults on their monthly payments. Landlords can only claim for rental guarantees if they meet certain conditions. This includes the completion of pre-tenancy checks including credit referencing and the maintenance of rental records. Furthermore, landlords will also need to follow policy requirements for the issue of terms of notice and eviction. Legal expenses will often be covered too under the rental guarantee, which will offer assistance with eviction.

Property Owner Liability

One of the standard aspects of landlord insurance is Property Owners Liability which will provide cover against Third Party Bodily Injury and Property Damage. The cover is usually available between £2 million and £5 million, and it protects the landlord against claims for negligence that may have led to an accident. As an example, it would provide cover for tenants who trip on the stairs because of poorly maintained carpets.

Legal Expenses

While legal expenses is not included as standard, it can be purchased as an add on. Legal expenses can provide cover for the costs associated with bringing or defending a legal claim that relates to letting a property. Legal expenses can soon mount up, so this cover is essential to protect you for any legal eventualities

Terrorism

This policy will provide cover against buildings, contents and rental income which relate to acts of terrorism. Terrorism is something that isn’t included as standard so it will need to be purchased as an add on.

Employer Liability

This would cover the legally required £10 million for claims from employees due to bodily injury or damage to property when they are conducting work on behalf of the landlord. This policy would only cover employed workers such as a cleaner on a salary and would not cover building firms contracted in to undertake work for the landlord.