Landlord’s Insurance Policy Should Cover – 5 Things To Consider

A landlord’s insurance policy, also known as a buy to let insurance policy, can be tailor made to cover a vast array of different things, some of which are vital while others are not so vital. The following five aspects are essential to all landlord insurance policies, so make sure they are all present in one form or another before signing on the dotted line.

1. Buildings and contents insurance

Landlords insurance needs to cover the building itself and the landlord-owned contents from accidental damage and theft in the case of contents. This is especially significant if the property is being rented in a furnished state. Of course you can opt for a general buildings and contents insurance policy instead however this type of policy will sometimes refuse to pay out in cases of theft by tenants.

2. Loss of rent

If your rental property should become uninhabitable, either through accidental damage or malicious damage, you can claim rental payments for the amount of time it remains uninhabitable. Some landlords insurance pays for a set number of months e.g. 12, 24 or 36 months, whereas others pay a percentage of the property’s value e.g. a maximum of 30% of the property’s value over a fixed amount of time. This aspect of landlords insurance means you can claim your much-needed monthly income even if the property stands empty during repair work.

3. Cover for all types of tenants

Some providers of landlord insurance refuse to cover properties that are inhabited by students, refugees, DSS tenants and other ‘high risk’ occupants. If you intend to limit your rental property to employed professionals then this aspect isn’t important, but if you are happy to have any type of tenant living in the property then you need to make sure your landlords insurance doesn’t place restrictions.  

4. Property owner’s liability

This fourth necessary aspect of landlords insurance covers you against accidents to persons living in the rented property. So for example, let’s say the tenants are lying in bed one night and the roof collapses, seriously injuring one of them. Should they decide to claim for loss of earnings, medical expenses etc. your landlords insurance will pay up to a maximum stipulated in the policy…and this maximum can be as high as £1million in some policies.

5. Legal Expenses

Unfortunately not all tenancies go according to plan and it may be that you, as a landlord, have to file an eviction notice and a repossession notice in the county court in order to get troublesome tenants to leave. Legal fees associated with repossessions are never cheap but most providers of landlords insurance cover such fees.

Hopefully you’ll never need to claim on a landlord insurance policy but if you do at least you know the money to pay the repair bills, legal fees and mortgage etc. won’t be coming out of your already stressed pocket.