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Last updated: 10 February 2022
Being a landlord can be stressful, you’re often unable to check on your property and make sure that it’s being well maintained. Although legally you do not have to get landlord insurance, you could end up spending much more money than necessary if you are not properly insured. It’s worth comparing home insurance plans to make sure you are covered should the worst happen, and you can put your mind at ease.
What is landlord insurance?
Landlord insurance is insurance which covers your rental property. This means both the building itself and the furnishings that you have provided. It can also cover the rent that you are entitled to if your renters fail to pay.
Do I have to get landlord insurance?
Technically, you legally do not have to get landlord insurance if you are renting out a property. A household insurance policy will not extend cover you if you’re renting out a property so it’s a worthwhile investment if you are planning on renting, especially to people you don’t personally know. The only exception to this is if you have a buy-to-let mortgage, in which it will often be a requirement of having a loan.
Why won’t my home insurance policy cover my rented property?
There are a number of issues that affect a rental property that don’t affect a normal home such as:
- Tenants can be unreliable for maintenance which can cause significant damage.
- You could be liable if your tenant is hurt within the property.
- You cannot see the property most of the time and therefore judge the state that it’s in.
What are the different types of landlord insurance?
Landlord buildings insurance
Buildings insurance is the most common type of cover when it comes to being a landlord. If you own the freehold of the property it will cover damage to the building itself. This means in the event of a fire or flood you will be covered for the repairs.
Landlord contents insurance
Often when renting a property you may provide it furnished. This means that while tenants are required to cover their own belongings, you will be covered for the furnishings you have provided (TV, Sofa, Wardrobes etc). You can even add accidental damage cover to your contents, to include breakages or spills caused by the tenants.
In the event of an insured event occurring such as flooding or fire, and the property is so damaged that you cannot rent it out anymore, this protection will cover you in this instance so that you can carry on collecting rent even when no one is living there.
Unoccupied property cover
If no one is living in the property for a period of over 30 days you will be covered as you will not be getting rental income. You can normally only qualify for this if you are doing repair work to the property.
Property owner’s liability
If someone is injured in the property and you are deemed liable this will cover the cost. This means it will pay for any legal costs if they take action against you. Most policies will give you at least a £1 million limit of cover, although there are higher options available.
How can I reduce the cost of my landlord insurance?
The main way to reduce your premiums is to make sure your property is in a good condition consistently. This will reduce the need to claim for repairs and therefore lower the amount you have to pay monthly.
Increasing the security around your property will reduce the chance of thieves. Installing alarm systems and/or motion-censored lights are common ways to do this.
Level of cover
Ultimately, the lower level of cover you have will mean the less you have to pay for your policy. It’s important to think carefully about this, compare home insurance policies, and then you can make an informed decision about the level of cover you need.