As a landlord, having landlord insurance is absolutely essential. A good policy will protect you against so many different potential issues, some of which are common and some much more rare. It’s easy to get complacent when things are running smoothly with your business, however having cover helps to protect you in worst case scenarios. We’re here to introduce the different things that landlord insurance covers (this is for the most part, so you always need to check these things are covered for your policy specifically.
What Does Landlord Insurance Cover?
Buildings and Contents
Having landlord insurance cover specifically rather than just home insurance policies ensures that not only are the building and contents you own covered but if there is any intentional or accidental damage created by your tenants, then you will also be covered. For example if a window is smashed, door broken or something like water damage restoration is required, then you’ll be covered. It’s also worth noting that you don’t have a responsibility for the tenants belongings (aside from ensuring that the house is safe and doors and windows are secure), as anything they bring into the property is their responsibility.
Loss Of Rent
Some landlord insurance policies cover loss of rent. When tenants don’t pay their rent and you have a mortgage, bills and other financial commitments, it can cause financial strain. This is especially the case if you own multiple properties and this happens at the same time across them. Having a contingency is absolutely essential anyway to help pay for anything that is required for the property, from a new boiler to a new wall light and everything in between. It is recommended that you have at least 30-35% of a year’s gross annual rental income in a contingency fund, so if your rental income is £15,000 a year, you should have at least £4,500 available at all times to cover any renovations, as a bare minimum. Considering a new boiler can easily cost that, we’d advise having more if possible.
Property Owners Liability
You will likely also get property owners liability cover within your landlord insurance, which safeguards you against potential legal claims, costs or damages suffered by third parties. This is one that is important, as often these things are completely unexpected and occur out of nowhere, even if you complete all of your due diligence and you think your property is completely safe. This is the benefit of having good insurance though, as you’re protected in all eventualities that you might not be able to predict.
Other Types Of Insurance To Consider
Every property is different, so when it comes to other types of insurance you might need, they also differ. That’s why we’d recommend working with a specialist broker. Just like you’d work with a broker for things like credit insurance, export insurance or life insurance, utilizing one for your landlord insurance will ensure you have a policy specific to you and your properties, so you don’t end up with a generic policy. This is especially important if you have quite unique or large properties!
