Landlord insurance is cover that protects landlords from the risks associated with their rental properties, typically including buildings and contents insurance, and sometimes includes landlord-specific covers such as property owners’ liability, loss of rent, and tenant default insurance.
COVID-19 impacted many industries, but according to Property Reporter, more than 60 per cent of UK landlords lost rental income during the pandemic, demonstrating why landlord insurance is a good idea.
There are three types of landlord insurance:
Landlord building insurance covers the cost of repairing or rebuilding your property should be damaged or destroyed. There is also landlord contents insurance that covers your furniture and belongings.
Tenant default insurance will cover your rental income for a period of time, should your tenants fault to pay.
Property owners’ liability insurance covers compensation claims made by a tenant or visitor for injury or damage related to your property.
If you own one or more rental properties, it is important to ensure you have the right insurance in place, as a standard home insurance policy will not cover the risks associated with renting out your property.
While landlord insurance isn’t a legal requirement, it’s often a requirement of mortgage lenders.
The cost of your policy will depend on your property and tenants, the type of insurance you choose, and the cover levels you need. As with all insurance, the insurer calculates your premium (the cost of your insurance) based on the likelihood you’ll make a claim and the possible cost of any claim.
The amount of buildings insurance you take out should be based on the rebuild value of your rental property. This is an estimate of how much it would cost to rebuild your house, including labour and materials.
Your contents insurance amount should be based on what it would cost to replace the contents you’re providing in your rental property. However, this doesn’t include your tenants’ items, as they will need to insure these separately.
If you’re looking for landlord insurance quotes, get in touch today.