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Last updated: 01 November 2021
Leasing out your property comes with certain risks. But with specialised buy-to-let home insurance, those risks can be mitigated.
What is buy-to-let insurance?
Buy-to-let insurance is a specific type of home insurance covering properties bought to be rented out.
Landlord dreams of the perfect tenant, and while that often does transpire, it’s never a dead cert. Leasing property presents certain risks to the landlord and insurer, in that there’s no guarantee your property will be treated with the same respect as if you, the homeowner, were living there.
But issues also arise through no fault of the tenant – there will always be instances of damp or boilers on the blink. Landlord insurance gives you that additional level of cover for any complications that arise from renting out property, including issues related to the tenancy itself.
Do I need buy-to-let insurance?
One caveat of standard home insurance policies is that, usually, they require you to live in the property. Therefore, you may find insurers won’t cover you if the property is rented out, though check the terms of a specific policy to be certain.
Furthermore, if you have a buy to let mortgage, most lenders will insist you have buy-to-let insurance too, though legally you don’t have to.
In sum, it’s in your best interest to have buy-to-let insurance if you’re a landlord.
What does it cover?
Buy-to-let insurance covers an array of situations.
- Contents insurance: Some landlords rent their properties as either part or fully furnished; you can get cover for possessions which are yours, such as sofas, fridges or washing machines.
- Buildings insurance: Covers the structure itself: damage to walls or floors through fires or flood, as well as replacement of permanent fixtures and fittings such as kitchens.
- Multi-property insurance: Taking out one all-encompassing buy-to-let insurance policy for all your properties could save you time and money.
- Home emergencies: Having a 24/7 handyman on tap to help in the event of a break-in or other hazards can be a god-send.
- Loss of income: Should your property be unliveable for a period then you can claim for income loss during that time.
- Liability insurance: Should a tenant have an accident resulting in an injury or death, liability insurance prevents the landlord from being sued.
- Legal insurance: Provides cover for any claim arising from disputes between tenants and landlords, including complications surrounding evictions and late rent payments.
What to consider when choosing buy-to-let insurance
When looking for buy-to-let insurance, keep these words of wisdom at the forefront of your mind.
At the very least, you should take out buildings insurance, which’ll cover the cost of structural damage. If you let your property with furnishings, make sure you take out contents cover too, else you’ll be forking out for replacements from your own pocket.
The degree to which you want additional cover, such as for accidental damage, legal issues or loss of income, will depend on your personal circumstances and the type of tenant you lease to. For example, if you have many student properties then accidental damage is more likely and therefore probably a worthy inclusion.
As we mentioned, if you let several properties then taking out multi-property insurance is a sure-fire way to save money overall too.
How much does buy-to-let insurance cost?
What you’ll ultimately pay for your buy-to-let insurance depends on several factors – the price isn’t the same for everyone.
Some of these variables include: the property size and age, the location, whether it’s a flat or house, what type of tenant you intend to rent to, and whether you’ve claimed on your home insurance before.
That being said, some premiums will always be better value than others. Our tool will use the property information above to compare home insurance quotes for you, so you can choose an insurer who gives you the level of cover you need for the best price.
How to get cheap buy-to-let landlord insurance
If you can afford to, always pay for your policy annually as doing so saves you money overall. In addition, upping your voluntary excess can often bring your premium down, though don’t get too carried away – you’ll have to pay up to this sum should you make a claim!