What types of landlord insurance are there?
People who are new to being a landlord don’t always realise that they may need specialist insurance to cover the properties they rent out, which is often also a requirement for their mortgage providers. Luckily, there are many insurance options available to landlords to protect their let properties, and their income.
- Landlord buildings insurance – this may be compulsory, so it’s worth checking this with your mortgage or loan provider
- Landlord contents insurance – this is optional, and covers the items you provide in the property for your tenants, including white goods, counter tops and carpets
- Portfolio insurance – this is for landlords that own five or more properties, and is a convenient and usually cost effective way of covering the buildings (and contents if required) on all of their let properties, all under one policy
- Home emergency cover – an optional cover that is often offered as an add-on to buildings insurance
- Rent guarantee and legal expenses cover – again, this is optional and can be taken out either as a standalone policy, or as an addition to a landlord’s buildings insurance.
Here’s a quick summary providing some more detailed information on each type of cover.
Landlord buildings insurance (per property)
Buildings insurance covers a number of insurable risks, including full replacement or repair costs, and the cost of clearing the site in case of complete destruction. The policy will usually cover the following:
- Fire or smoke
- Theft, vandalism or malicious damage
- Oil or water leakage
- Lightning, storm (excludes gates and fences) or earthquake
- Burst pipes
- Impact caused by vehicles, falling trees, animals, aircraft, aerials and masts
- Civil commotion (usually excluding properties in Northern Ireland)
- Property owners liability
Contents insurance (per property)
You can either take out contents insurance as a standalone policy, or as an add-on to your landlord’s buildings insurance. You can choose the level of cover you need to protect your property against fire and theft, depending on whether you let the property in a furnished or unfurnished condition. Contents cover includes furniture, household utensils, kitchen electrical equipment, curtains and carpets. You can also extend the level of cover so that accidental damage is included.
Portfolio insurance is essentially buildings insurance, however the key difference is that you can insure five or more properties all under the same policy, with one premium and one renewal date. Not only does this make paperwork less taxing, but usually discounts will be applied the more properties that are added to the policy, making it more cost effective. You can also insure blocks of flats on these policies.
Home emergency cover
You can add home emergency cover to your landlord buildings and contents policy to protect your property, and your tenants, against the loss of essential services. This cover usually protects you 24 hours a day for emergencies such as:
- Plumbing and heating system problems
- Security of doors and windows
- Roofing problems
- Drains and sewer blockages
- Down pipes and guttering
- Domestic power supply problems
- Lost keys
- Vermin infestation
For boiler cover, this policy will require a 12 month service.
Legal expenses cover
You can add legal expenses cover to your landlord buildings and contents policy to provide you with legal protection. Sometimes this is even included as standard, so it’s worth checking your policy wording. Legal expenses will cover for the following events:
- Property damage, nuisance and trespass
- Recovery of rent arrears
- Prosecution defence costs
- Accommodation costs
Rent guarantee insurance
There may be an occasion during the tenancy where your tenant has difficulty paying their rent, often due to unforeseen circumstances - it can happen to the best of landlords. Rent guarantee insurance can protect you as a landlord from being out of pocket in the event that your tenant falls into rental arrears. Endsleigh’s rent guarantee policy also includes legal expenses cover, which provides 24 hour legal support, as well as covering the cost of disputes in relation to repossession, eviction and recovery of rent arrears. It can be an invaluable policy for landlords who rely on the rental income to make their mortgage payments.
With all of these policies, it’s important to bear in mind that most will have an excess to pay, should you need to make a claim.