Mia had always wished she owned a second property but she was surprised when her friend said that her tenants hadn’t paid their rent for 13 months. This horrified Mia who had thought that it would be so easy to grow money on the landlord money tree and secretly thought her friend earned easy money with no responsibilities. Mia’s friend had had to find the money for maintenance costs and repairs caused by the damage the non – paying tenants had caused. Mia was shocked to hear that her friend also paid for Landlords Insurance even though she wasn’t living in the property.
As ever, Mia was keen to know more. She questioned whether in the UK she needed to have landlord insurance?
Is Landlords Insurance a legal requirement?
Taking out landlord insurance isn’t a legal requirement, but most mortgagors for buy-to-let properties will require you to arrange a buildings insurance policy as a protection against amount of the mortgage or bank loan arranged. Also, the responsibilities in your tenancy agreement may be best served by an insurance agreement, especially to avoid putting your financial future at risk.
She wondered what would happen if she didn’t have landlords insurance? Why do I need landlords insurance?
Unfortunately, things don’t always go to plan, and landlord insurance can provide cover for a wide range of insured perils putting your property at risk. Core cover typically includes loss or damage caused by fire, lightning, aircraft, malicious damage, explosion, escape of water, storm or flood, impact, accidental damage or subsidence.
There are many reasons to protect yourself with landlord insurance, such as peace of mind or to meet contract requirements from banks or building societies specifying insurance cover against a loan or mortgage.
The Core Perils
– Buildings Insurance – Owning a building without building insurance leaves you very exposed to large potential losses arising from a serious fire, storm or flood. It’s not just the damage to the building that must be considered.
Re-building a property following a large fire can be a complicated and extended matter for a whole variety of reasons. Planning and unexpected delays caused by weather or a shortage of building materials which is very common following the covid pandemic can extend the rebuilding periods. This can run to 24 or 36 months, so it’s very important to take this fully into account.
– Contents Insurance covers damage to your own possessions in the property such as furniture and appliances
– Loss of Rent Insurance covers loss of rent if tenants can’t live in your property due to a fire or flood if something happens to your property, it may not be possible for your tenant to live in the premises, which of course means that you’re likely to lose out on some rent. You can claim for that loss of rent if your building is uninhabitable as long as the damage or an accident (such as fire, storm, flood or escape of water) is covered by the rest of the policy.
– liability insurance to cover you if you’re taken to court – this type of insurance can include property owners’ public liability or employers’ liability.
– unoccupied property cover to cover you in-between tenants.
What about the loss of rental income you would suffer during the period the property cannot be occupied?
Renting out a property comes with its own unique set of risks. Without landlord insurance to protect you, you’re vulnerable to loss of rent and any legal claims from members of the public for accidental bodily injury or damage to their belongings arising at the property.
In addition to the core insurance perils, property owner policies can include a range of different extensions. These are summarised below.
Loss of metered water as a result of damage caused by an insured peril
Unauthorised use of electricity
Trace and Access
Damage to the building due to theft or attempted theft
What types of landlord insurance are available?
Every landlord is different, and there are a variety of insurance products to choose from, depending on whether you are a commercial or a residential landlord or a mix of both, or if you own a single property or multiple properties.
For a landlord with a property portfolio, a single policy to cover all properties can be arranged. It’s very flexible, as adjustments can be made at any time to add or delete properties.
Beware the pitfalls and the scams and get a landlord insurance quote from reputable companies.
Whatever level of landlord cover you’re looking for, you can find a quote tailored to you.
Mia found that MoneySupermarket provide good options…..SimplyBusiness is also a good starting point and allows you to compare quotes from leading brands such as AXA, Homelet, DAS, Ageas, Churchill and Covea.
Why compare landlord insurance quotes?
Comparing quotes: When you compare landlord insurance quotes from a range of different providers you increase your odds of discovering a cheaper price for the very same cover so you get the right landlord insurance policy for your needs.
You can search for flexible insurance tailored to your individual property, with covers to protect everything from your building to your rental income. It’s also best to call the insurance company before you commit to an online quote and learn more about the cover they offer before you commit.
Please note that the exact cover extensions and limits provided do vary between insurers, so it’s important to check the policy wording and speak to your advisor to ensure your demands and needs are fully identified and protected.