When and why do I need landlord insurance for myself and my rental property?

August 10, 2021Categories: Landlords
Person sat on the bathroom floor with two children

When you’re a landlord providing accommodation to tenants, there are certain risks you need to consider, over and above those that apply to a property when it’s your own home. That’s why insurance providers have specialist policies for landlords.

Here are the key things you need to think about insuring against when you’ve got a rental property:

 

Damage to the fabric of the property

Buildings insurance is there to cover you for repairs – right up to the cost of completely rebuilding the property. A fairly standard policy will cover you against damage caused by natural events, such as storms and frost, as well as vandalism, burglary and accidental damage.

Damage caused specifically by tenants

This is known as ‘malicious damage’. While many standard landlord policies will include it, make sure you check. And if you have a fully furnished let, you might want to take out additional cover for the contents you’ve provided.

Alternative accommodation costs

Most tenancy agreements state that if the property becomes uninhabitable, the landlord is obliged to provide alternative accommodation for the tenants. If remedial works are going to take some time, re-homing tenants could prove expensive, so it’s well worth having insurance. As long as the damage to the property was caused by an insured event – e.g. a flood or fire - alternative accommodation insurance may cover the cost for you. Some landlord policies include this, others will have it as an optional extra.

Injury compensation claims from those living in or visiting the property

You have a legal responsibility to make sure that the property you’re letting is safe and in good condition. If a tenant, visitor or contractor is injured because of something unsafe in the property – or if your tenant’s belongings are damaged - they could take legal action against you and make a claim for compensation. Having liability insurance could potentially save you thousands in legal fees and compensation.

Home emergency cover

Even if your rental property is in great condition, there’s always the chance something will go wrong. The boiler could break down, the pipework could split and cause a huge leak or the electrics could fail. The quicker you can have contractors at the property to deal with the issue, the less damage there’s likely to be and the quicker your tenants will have a fully functional home once again. Our own insurance services offer landlord home emergency cover, which includes:

  • 24/7 access to approved tradesmen in the event of an emergency
  • Costs of up to £500 per claim with no excess to pay
  • The claim can be reported directly by your tenant or agent so there’s no delay

Loss of rental income

Although it’s still relatively rare for tenants to default, if your tenant can’t or won’t pay their rent, you could be left without any income for months so it’s well worth considering rent protection insurance. The one we offer includes:

  • 100% of the monthly rent for up to 12 months if your tenant defaults (up to a maximum of £35,000)
  • Up to £15,000 for legal costs arising from regaining possession of your property
  • An automated claims process

See more information on our website.

Landlord insurance cover: summary

Standard policies should include:

  • Buildings insurance for rebuild purposes
  • Accidental damage cover
  • Public liability insurance

Many also include, but need to check:

  • Malicious damage and theft by tenants
  • Alternative accommodation, in case your tenants need to be re-homed while any necessary remedial works are carried out on the property
  • Legal expenses

Separate cover usually required for:

  • Rent protection
  • Home emergencies
  • Glass & locks replacement
  • Boiler repair or replacement
  • Equipment breakdown for white goods, etc

If you’d like to chat through any aspect of landlord insurance cover or get a quote, you can submit an enquiry via our website or call into your local branch any time.

 

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