Many landlords who are new to letting a property may not realise that they need specialist insurance to cover the properties they rent out. General home insurance isn’t adequate, as it doesn’t cover all third party risks that can be encountered in a let property. Here we lay out the types of insurance you may need to consider as a Landlord.
Landlord buildings insurance
It is normally a requirement set by your mortgage provider that you have buildings insurance to cover all insurable risks, including full replacement or repair costs and the cost of clearing the site in case of complete destruction.
When you get a quote, you’ll need to know the cost to rebuild the property. This isn’t the same as the market value, or the price you paid for it. If you’re unsure of the rebuild cost, a chartered surveyor can do a professional valuation; or you can visit the Association of British Insurers (ABI) website where you can use their online buildings cost calculator to get a valuation.
Buildings insurance generally covers your property against loss or damage caused by:
- Fire or smoke
- Theft or Vandalism
- Oil or water leakage
- Lightning or Storm (excludes gates and fences) or earthquake
- Burst pipes
- Impact caused by vehicles, falling trees, animals, aircraft, aerials and masts
- Civil commotion
Landlord contents insurance
Landlords may not necessarily need full contents cover, unless the property is fully furnished.
Depending on the insurer, you can usually choose the level of cover you need to protect you against fire and theft. Contents Insurance includes furniture, kitchen electrical equipment and soft furnishings. You can often extend the cover to include accidental damage.
Home emergency insurance
It may be a good idea to add home emergency insurance to your let buildings or contents policy. This cover protects you against the loss of essential services in your property, 24 hours a day.
Home Emergency Insurance usually covers contractor call out charges, labour charges, parts and materials up to a maximum value for each emergency in connection with:
- Plumbing and heating system problems
- Security of doors and windows
- Roofing problems
- Drains and sewer blockages
- Down pipes and guttering
- Electricity supply problems
- Lost keys
This type of cover can be useful if you don’t use a Letting Agent and you live some distance away from your property. Home Emergency insurance can be added to a basic policy at an additional premium.
Rent guarantee insurance
During your buy to let life, there may be an occasion where your tenant has difficulty paying their rent, either through no fault of their own, illness or redundancy for example - or simply a tenant who won’t pay up.
Rent guarantee insurance helps protect your investment against long term missed payments. Often invaluable for landlords who reply on rent income to pay the mortgage.
Legal protection is often included to recover rent, help evict squatters and defend legal rights.
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