A Guide to Insurance Policies for Landlords

Insurance

More and more people are seeing 'Buy to Let' as an alternative form of pension provision.

However, it is not without its pitfalls. Taking on tenants can be a risky business and if you are dependant upon the income from renting to pay the mortgage, then you will need a continuous let with the minimum periods of vacancy. What if this doesn't happen? Can you meet the payment shortfall over a sustained period? What if you get a bad tenant who causes damage to the property or misses rent payments?

As a landlord, you are effectively using your property as an extra source of income - and you will need to protect this.
No matter what type of landlord you are, whether the small individual renting out a single property or a full blown property investor, all landlords is the need to consider purchasing 'landlords insurance' to protect their investment.

Any normal home insurance policy will not be valid if you are taking an income from the property. You will need to consider taking out a 'Residential Landlord Policy'. These are now commonly known as 'Buy to Let' policies.

A typical Landlord's Insurance Policy will usually cover you for:

  • Damage by Fire - this will usually also cover the loss of income whilst any repairs are being carried out.
  • Malicious damage - or vandalism caused by tenants.
  • Deliberate or intentional Damage - caused by tenants.
  • Legal Liability for Injuries - to people or damage to the property.
  • Major Risks - such as storm damage (other than gates and fences) e.g. damage caused by lightning.
  • Theft
  • Oil or Eater Leakage
  • Smoke
  • Subsidence
  • Burst pipes
  • Impacts - from vehicles, falling trees, animals, aircraft, aerials and masts.
  • Civil Commotion
  • Earthquake
  • Contents - if the property is let furnished.
  • Legal Expenses - to cover the recovery of unpaid rent and any eviction procedures.
  • Rent Default and Theft - by the tenant.


Most Landlord policies will cover more than one property. Most policies will not normally cover any personal effects. This will be the responsibility of the tenant to protect these with separate insurance cover.

When assessing the premium, different insurers will use different ways of assessing the risk to your property. Some of the major factors which they will take into account are:

  • The location of the property (postcode).
  • The buildings sum insured.
  • The type of property (flat, detached, terraced etc).
  • The age of the property.
  • A history of claims.
  • The type of tenants in the property.

Most major insurance companies will offer 'Landlord's or Buy to let' insurance. If you are confused by the plethora of policies available, consult an independent insurance broker who will advise you.

Remember to take time to shop around - you know it makes sense!

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