Do I Need Landlord Insurance?

There is no legal obligation for a landlord to take out landlord insurance. However, it’s highly likely that your mortgage lender will require you to take it out before you take on tenants. This is because a conventional home insurance policy does not offer appropriate cover for rental activities.

Just because it is not mandatory, it certainly doesn’t mean that you shouldn’t take landlord insurance out. Why wouldn’t you want to safeguard your financial future and protect your investment?

It’s important to remember that you may need written permission from your mortgage lender before you let your property. If not, you risk breaching the terms of your mortgage – so don’t skip this step!

What is landlord insurance?

Landlord insurance is designed to protect you, your property and your tenants. It gives you peace of mind that your rental property is protected when you have tenants living in it, and even when it is vacant between lets. It is similar to normal household insurance cover, except it is specifically designed for buy-to-let properties.

landlord insurance documents

Providing tenants with a property to live in is a big responsibility. If a tenant becomes at risk due to structural issues, security issues, fires or floods then it will probably come down to you. You may risk facing a legal claim as a result. This is where landlord insurance will help you out.

What does landlord insurance cover?

Landlord insurance covers a range of things, including property owners’ liability insurance, contents insurance and buy-to-let buildings cover. Different policies will have different levels of cover, but you can expect to find cover for:

  • Loss of rent
  • Accidental damage
  • Fire, lightening and explosions
  • Fixtures and fittings
  • Malicious damage
  • Unoccupied properties
  • Legal expenses
  • Rehousing costs if a tenant cannot stay in the property due to an insured event (i.e. fire or flood)

landlord handing over keys to a tenant

In a nutshell, landlord insurance essentially provides protection for your property against the unfortunate eventualities you are at risk of encountering as a landlord.

Does landlord insurance cover tenants’ belongings?

Whilst landlord insurance can cover a lot of eventualities, it cannot cover your tenants’ belongings. Landlord contents insurance will only cover your contents such as any furniture and appliances that you choose to supply as part of the tenancy. Many policies will include contents insurance as standard, and others you may have to select it as additional cover. If any of your furnishings become damaged, you may be able to claim on your insurance policy in order to replace them.

a tenants belongings in a buy-to-let

If, for instance, your tenant’s possessions were stolen in a burglary or destroyed in a fire, they wouldn’t be covered under your landlord contents insurance. Make sure your tenant is clear on this at the start of the tenancy. If it’s something that they are particularly worried about, they may want to look into tenants’ insurance as this can cover against these eventualities.

How much is landlord insurance?

There is no such thing as an average cost for landlord insurance. Every landlord’s needs and circumstances will be different, meaning that so will their insurance policy premiums.

There are a number of factors that will determine the price you pay for landlord insurance. This will include the type of cover/s you have chosen, the amount of cover you need and the rebuild or replacement value of your property and the items within it. The higher these values are, the more your premiums are likely to be.

cost of landlord insurance

Insurers may also take the location of the property into account when determining premium prices. They may also consider any security measures and the employment status of your tenants. When taking out landlord insurance, it’s important that you answer your insurer’s questions about the property and the tenancy accurately. Giving the right information means they can get you the right cover and you be sure that you will be able to make a claim in the future.

 

To find out how much your landlord insurance quote would be, contact us at CIA Landlord Insurance today and we can help. We’ll never be beaten on price. We’ll provide you with a great quotation on a new policy, and help you take the cover out if you’re happy to go ahead.