The type of landlord insurance you need depends on the specific risks you want to cover against. You may want to protect your building against damage and yourself against compensation claims, but you might also consider cover that protects against legal fees, risks during void periods, and more.
There’s a range of landlord insurance covers that you might consider, each of which covers a different risk to you or your buildings. These include landlord liability insurance, buildings cover, and loss of rent.
It’s important to remember that a conventional home insurance policy is unlikely to protect you if you choose to rent your property out. In order to stay protected, you need to take out dedicated landlord insurance.
So which covers might you need as a landlord?
Landlord liability insurance protects you against the cost of compensation claims arising from injury or damage to a tenant or visitor as a result of something that goes wrong with your property. Claims of this sort can be significant, so it’s important that you are covered. Incidents that cause claims could be as simple as a trailing wire or, more seriously, faulty electrics. Landlord liability insurance covers you against the cost of the claim and associated legal expenses.
Landlord buildings insurance covers you against damage to the property itself, when caused by an incident such as fire, flood, or vandalism. This cover protects the structure of the building, for example walls and floors, but not the contents – for this, read about landlord contents insurance below. Again, remember that your conventional home insurance policy will not cover you against these risks if you choose to let the property out.
Landlord contents insurance protects items like white goods and furniture against theft or damage. You should remember, though, that this cover does not protect you against normal wear and tear sustained during the course of a tenancy. Similarly, it’s important to note that a landlord contents insurance policy will not protect your tenants’ belongings, so you may wish to encourage them to take out their own cover.
Loss of rent insurance pays out in the event that your property becomes uninhabitable for a period as a result of an insured event such as fire or flood. This shouldn’t be confused with tenant default insurance, which is designed to protect you against non-paying tenants.
If your tenants fail to pay the rent for two consecutive months, tenant default insurance may cover you. This type of insurance can pay out up to eight months’ rent in these circumstances. However, you must make sure that you conduct credit and referencing checks at the beginning of a tenancy, in order to remain covered.
Accidental damage insurance covers you against problems such as a wine spill on a sofa or the impacts of a botched DIY job. Depending on the cover you take out, it might also protect you against outdoor accidents such as broken windows. Again, though, you should remember that accidental damage insurance doesn’t protect against normal wear and tear, and it generally won’t cover you against bad work carried out by contractors.
If your tenancy agreement requires you to provide alternative accommodation in the event that your property becomes uninhabitable, alternative accommodation insurance should be able to cover the cost. Like loss of rent insurance, though, alternative accommodation cover will only pay out in the event that your tenants have to move out because of a specific insured event, such as fire or flood.
If you’re worried about your property during void periods, you might consider taking out unoccupied property insurance. This provides cover during times in which the property is unoccupied, but you should note that you may need to carry out certain checks at regular intervals, in order to remain covered.
Landlord home emergency insurance provides you with 24/7 access to help with plumbing, drainage, heating, or power, along with damage to access points that could render the property insecure. In some cases landlord home emergency insurance may also cover the cost of alternative accommodation in the event that one of these problems renders the property uninhabitable for a period.
Finally, landlord legal expenses insurance provides cover for up to £50,000 of legal expenses associated with your property. This might include eviction fees, or court costs accrued while chasing tenants for unpaid rent. You’ll also have 24/7 access to a property law expert.
Read more about our individual landlord covers.