Is landlord property insurance worth it?

If you are new to the world of landlords and wondering whether landlord property insurance is worth it, then the answer is most certainly, ‘Yes, it is’.

That’s becausestandard home insurance may not be suitable or provide you with enough cover and may not even be valid on a rental property.

This is why there is specialist landlords’ insurance available and it’s also referred to as buy to let insurance.

Usually, landlords insurance will include buildings insurance to help cover against various events including flooding, fire and also subsidence.

And should your rental property be furnished, then it’s certainly worth considering contents insurance, even if the tenants already have a policy in place, so you will have peace of mind.

Searching for landlord insurance quotes

When searching for landlord insurance quotes, the other extras that can be added to a policy may include:

  • Claiming for repair damage

Should you suffer from an emergency repair following a pipe burst or gas leak, then the costs will be covered.

  • Accidental damage cover

This is for the contents and the building should an accident cause damage.

  • Legal cover

All landlords should have legal cover should they need to undertake eviction proceedings and also protect them against any legal claim.

  • Compensation claims

Should your tenant be injured, then you’ll need to prepare for compensation.

  • Rent loss

This could be a popular choice if your rental property has been left uninhabitable by the tenant.

  • Income loss

Should your property be damaged, then you’ll need loss of income cover if your tenants have been forced to leave.

Property owner’s liability cover

There’s also the issue of property owner’s liability cover, which will help meet the cost for damages should someone suffer from an injury when visiting your property, or their property is damaged by yours.

For those landlords with a portfolio of properties, then it’s possible to get a single landlord insurance policy to cover all of them rather than having to source separate policies from insurers.

It’s also important to appreciate that while there is no legal requirement to buy landlord insurance, some landlords may find that their buy to let mortgage lender may insist they have the landlord buildings insurance.

That may come as a surprise to some of the 2 million landlords in the UK, so it’s probably a good idea to visit the Landlord News website on a regular basis to keep up-to-date with the latest news and regulations affecting the buy to let sector.

It’s also worth appreciating that while joining a landlords’ association is highly recommended, the membership of one or more is no replacement for having adequate landlord insurance cover in place.

Information concerning landlords

While these organisations will offer access to information concerning landlords, along with forums and access to legal advice, landlords really should consider buying a policy rather than relying on the associations’ forums and offerings.

There’s also the potential that an insurer will ask you what your tenants do and they may charge more if they are students or receiving housing benefit, for example.

When applying online, there will be a drop-down box on the insurer’s website with a number of categories for you to select including retired, asylum seekers and employees.

One reason why insurers will charge more is that with a lack of income means there is a higher risk to the insurer. And if you’re looking for insurance to pay out for non-payment of rent then the profession, or unemployment, of your tenants could have a major impact on the policy’s cost.

As mentioned earlier, there may be situations that landlords will need to consider, for example, should your property be left vacant for more than 30 days, then you’ll need extra cover.

Need to take out a separate insurance policy

That’s because insurers will cover, usually, a rental property for up to 30 days, so if you leave your property empty for several months, to carry out major works, then you’ll need to take out a separate insurance policy for this purpose.

It’s also worth bearing in mind that landlords will need to meet their legal obligations such as installing carbon monoxide and smoke alarms, otherwise they may invalidate their insurance policy.

Finally, when searching the market for landlord property insurance, then it’s important that you do not opt for the cheapest cover available and that you take time to read the small print to ensure that the cover will meet your needs for any future potential claim.

About S Thompson

Simon Thompson is Chairman of the Landlord Syndicate and CEO / Co Founder of Accommodation for Students Ltd.

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