Is Landlord Insurance Worth Buying?

If you’re reading this then it’s safe to say you are either a private landlord already or you are looking into the possibility of buy to let property investment. Either way you have probably read about or been offered landlord insurance in the past. This type of insurance has been designed specifically with buy to let investment properties in mind, and as such it is definitely worth considering.

 What does landlord insurance always cover?

As with any other type of insurance policy a landlord’s insurance policy is individual to the person taking it out. A standard policy however will include the following:

  •  Buildings cover – just as in a normal house insurance policy, the structure of the building itself is covered against serious damage e.g. fire, flood, acts of nature etc. In addition though, landlord’s buildings cover also insures against accidental damage caused by the tenant e.g. broken windows, holes in walls or ceilings etc.
  •  Contents cover – anything inside the rental property that is an integral part of the structure or that belongs to you personally is covered by this section of a landlord insurance policy. So, all fixtures and fittings, the carpets and curtains and any furniture left within the residential property are covered against accidental damage and loss.

The rest of a private landlord insurance policy is optional and you, as the landlord, can pick and choose what to include. To help it to cover most eventualities though you should definitely consider adding the following at the very least:

  •  Landlord or public liability insurance – a tenant is just as likely to die by accident in your rental property as they are anywhere else in the world. Accidents such as electrocution, carbon monoxide poisoning and unstable or rotting ceiling joists that suddenly give way are rare admittedly, but they do occur and you need to be covered against them. By adding public liability insurance to a private landlord policy you can pay any relatives that may want to claim following an accident.
  •  Loss of rent – let’s say that your investment property catches fire one day and you have to temporarily rehome your tenants because the property is deemed uninhabitable. The Loss of Rent option on a landlord insurance policy will not only help to pay for alternative accommodation, it will also provide you with an equivalent rental income for the duration of the repairs. Some policies will cover up to 36 months of rental payments while insured repairs are taking place.

Of course landlord’s insurance doesn’t cover everything but it does cover a lot more than a standard home insurance policy. Your buy to let mortgage lender might stipulate that you have to have a landlord insurance policy but even if they don’t it is something you should seriously consider. After all, your investment property is in many ways your nest egg for the future so it makes perfect sense to look after it as well as you possibly can.