What Insurance do Landlords in Scotland Need and What Does it Cover?

What types of insurance do landlords in Scotland need and what does it cover?

Landlord insurance protects your property from risks in the same way as any home policy. The term covers everything from buildings and contents policies to landlord liability and home emergency cover. While some insurers offer comprehensive landlord packages, you can take out separate policies depending on your needs.

What insurance do landlords need in Scotland?

In Scotland, where the majority of properties are freehold, buildings insurance is the responsibility of the property owner – unlike elsewhere in the UK where leasehold properties often have insurance included in service charges.

Landlords in Scotland who rent out property in a block or tenement must have the correct insurance in place to cover the costs of putting right any structural damage to the whole building. Known as ‘common insurance’, such policies are a legal requirement in Scotland, though are often taken out as a joint policy by owners of all the properties in a block.

If you are renting out a house in Scotland, you aren’t required by law take out insurance, though it is a good idea to have a buildings policy to protect your property and your investment. If you have a buy-to-let policy on your rental property, your lender will usually require a bespoke landlord buildings policy to be in place.

Accidental landlords in Scotland, who decide to rent out a property they’ve previously lived in, must contact their insurer before finding tenants. Normal residential policies won’t be suitable for rental properties – because the risk involved is considered greater than when the owner lives in the property themselves. You will need to discuss moving to a landlord product with your insurer.

What does landlord insurance cover?

The types of landlord insurance are:

Landlord buildings insurance

To cover the costs of repairs to the structure of the property or to rebuild it if it is irreparably damaged. Your cover will include damage due to:

fire
theft
vandalism
malicious damage
subsidence
water

Landlord contents insurance

You will need contents insurance to cover any furniture, fitting, fixtures and appliances which you have supplied. You are not required to insure your tenants’ possessions – that is their responsibility. You should insure your contents adequately to replace everything which is damaged.

Landlord liability insurance

Landlords are often advised to take out public liability insurance to cover them for any accidents which happen to their tenants or guests on the premises.

Landlord income protection

This type of insurance covers your rental income if your tenant stops paying or you can’t find a tenant for your property. It is useful if you would struggle to pay your mortgage without your monthly rent.

Home emergency cover

This type of insurance covers you for boiler breakdowns, plumbing and electrical issues, even rodent infestations, usually with 24-hour access to engineers. It can be useful if you don’t have a managing agent for your property or you live a distance away.

How much does landlord insurance cost?

Costs vary enormously depending on the level of cover, size and location of the property and the security features you have. Costs will also depend on the insurer you choose, so it is important to get multiple quotes or use a comparison site. Don’t go by price alone, check that the amount of cover is adequate to your needs. Make sure your insurer is properly authorised and regulated by the Financial Conduct Authority.

Do landlords need contents insurance?

Landlords with furnished properties should definitely take out a contents insurance policy, to cover all items in the rental home against loss or damage. Landlords with unfurnished properties are also advised to consider contents insurance to cover the building’s fixtures and fittings such as carpets and electrical appliances, though the level of cover will be less.

Who pays for insurance in a rental property?

Landlords are responsible for buildings insurance to the property and contents insurance to cover anything they have supplied. Their contents cover won’t apply to the tenants’ belongings.

Which insurers offer landlord products in Scotland?

These 10 companies offer landlord insurance policies in Scotland. For the most competitive rates, shop around and visit comparison sites before you choose.

Landlord insurance is one of the things new landlords need to organise before advertising their properties to tenants. If you’re a new landlord in Glasgow, we can advise you about all the things you need to consider. Contact us today to discuss our services for landlords.