If you are the owner of a property that you rent out to tenants, or you thinking of becoming a landlord, then you will need to think seriously about getting the right kind of insurance from a suitable company such as Simple Landlord Insurance.
Landlord insurance, which is also sometimes referred to as buy-to-let insurance, is not the same thing as standard home insurance or buildings insurance, and although it is not compulsory from a legal standpoint, the risk of not having an appropriate policy is too great to contemplate. As a landlord, you are not responsible for the tenant’s possessions, and these should be covered by the tenant’s own contents insurance.
However, you are responsible for the condition of the building, and should any harm come to the structure, the fixtures or fittings of the property, it is the landlord who is left with the bill. For this reason, lenders of buy-to-let mortgages will invariably insist on landlord insurance.
What’s the difference between landlord insurance and home insurance?
Landlord insurance premiums are typically more expensive than those of standard home insurance. Consequently, some landlords make the mistake of getting a home insurance policy to cover their rented out property, only to find that the policy is null and void as soon as the insurer learns that the property is in fact rented.
If you have a tenant in your property, you must get specific landlord insurance. The main reason that the premiums are a little more expensive is that the insurer is less confident of the behaviour the tenant and the potential risk to the property that they may pose.
Another important consideration when it comes to landlord insurance is public liability.
Should someone – a tenant or a visitor – fall or sustain an injury of some kind while in your property, it is likely to be you that is responsible and you may be forced to pay damages. Given that the UK is becoming an increasingly litigious country, it is always worth getting landlord insurance that includes public liability.
Landlord insurance costs
As with all kinds of home insurance, the amount you spend on your premium will depend on a number of factors. The location of your property, and its perceived risk of theft or criminal damage, is a major factor, as is the size and age of the building.
One thing that is particular to landlord insurance policies is the duration of the time that coverage will continue in the event of the property being unoccupied. Many insurers offer policies that only provide coverage for 30 unoccupied days, but you may well find insurers who will provide coverage for longer periods, but this may impact on the cost of the premiums.
It’s also worth bearing in mind that a normal landlord insurance policy doesn’t cover you for loss of earnings if your tenant fails to pay their rent.
However, there are ‘rent guarantee’ policies that do this, and you may find it possible to get a single policy that combines the two types of coverage, although this will likely entail larger premiums.