A Guide To Landlord Insurance

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guide to landlord insurance

Insuring your property as a landlord is essential. Because no two landlords will have the same portfolio, landlord insurance policies are very highly tailored. Typically landlords will seek cover for their buildings, their contents and risks posed by tenants such as loss of rent and liability claims. The minimum requirement for being able to let property legally is building insurance although most landlords will get more comprehensive cover than this with CIA. Some of the types of cover you’ll be able to receive include:

  • Building Insurance
  • Contents Insurance
  • Loss of Rent
  • Liability Claims
  • Legal Fees

How Cost is Determined

When insurance providers are calculating the cost of your policy they’ll look at a few key factors such as how property you own, where it’s located and what its current value is. Of course the amount of property you own will have quite a considerable impact on the cost. The more property you have, the more likely you’ll need to make claims. The reason the location of your property is important is because it determines how much risk your property is at from theft and vandalism. Properties in high-crime areas are inevitably going to cost more to insure than properties in affluent areas.

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The value of your property is the last consideration. The value of its contents will also come into play, especially if you have contents cover included in your policy. You should be sure that you agree with the insurance provider’s valuation of your properties before you take out a policy with them.

How Much Buildings Insurance Do I Need?

The amount of building insurance is related to the rebuild cost and not the actual market value of the let property, this is the same for all houses. The building insurance sum insured needs to include all costs for rebuilding the property in the event of a total loss. This would include; rebuild cost, surveyors, legal fees and site clearance. When the property is surveyed by a mortgage lender they will normally indicate the buildings sum insured required and this should be index-linked each year to account for price rises.

Why Landlord Insurance is Important

The reason it’s so important to get a good landlord insurance policy is that to be without one and simply hope for the best is too much of a risk. Some of the problems that landlords can face can be devastating if insurance isn’t in place. For example a hefty liability claim that goes against you can be enough to put you out of business if you don’t have insurance to cover it.

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By having a comprehensive insurance policy you can operate business with peace of mind and focus on what’s most important such as maintaining your properties and keeping your tenants happy.

Why Building Insurance is Essential

The costs associated with building repair can be extremely high so it’s essential then you have buildings insurance in place. Most building insurance policies will provide cover for:

  • Damage from Fire
  • Flood damage
  • Damage caused by Earthquakes
  • Subsidence
  • Theft of Contents
  • Vandalism

If the property is let unfurnished or the tenants bring their own furniture and goods then it is their responsibility to arrange adequate contents insurance. As with all insurance, the premium is related to the amount of cover or sum insured required. It is also a false economy to deliberately under-insure to get a lower premium as the landlord insurance companies will pro-rata the payment in the event of a claim.