What to look for when selecting landlord insurance
We understand that you have a lot on your plate as a landlord, and finding the right level of cover can be overwhelming. There is a lot to consider when it comes to managing tenancies and ensuring your rental property is safe and secure. That’s why we’ve put together this guide to help you get the most suitable landlord insurance for you, including options for buy to let properties.
Do you need landlord insurance?
Landlord insurance is not required by law. But if you have a mortgage, the lender may require you to get building insurance which also is covered by landlord insurance. Even if you don’t have a mortgage, landlord insurance is an excellent way to protect yourself against the most significant risks associated with renting out homes.
Is it worth it to get a landlord insurance?
If you want to be financially secured against a number of risks, landlord insurance is a worthwhile investment. What would you do if something terrible occurred to your property and you hadn’t got home insurance?
Assume your rental property has been damaged by fire and required repairs or reconstruction. Can you afford to pay for the repairs yourself if you don’t have insurance?
If you had landlord insurance, it would cover the cost of repairing or rebuilding your property if it had been damaged by an insured risk, ensuring you have peace of mind.
Types of landlord insurance cover
Regarding rental property insurance, there are 3 primary types of coverage:
Building Insurance
Cover the construction of your property. Certain risks are covered, such as fire, theft, and flooding.
Contents Insurance
Cover specified items left in the property for the renter to use. For example, white goods and furniture would fall under contents cover.
Liability Insurance
Covers third-party legal liability for personal injury or property damage.
Aside from the basic types of coverage, you may have extra elements such as accidental damage, loss of rent and other housing, intentional damage, and employer responsibility.
A landlord may also get specialised insurance for specific types of properties. Examples include block of flats insurance, commercial landlord insurance, and student landlord insurance.
How do I choose insurance for my rental properties
Choosing landlord insurance, like any other essential purchase, is something you should consider carefully. With so many factors to consider, you’ll most likely want to consult with experts to ensure that your coverage meets your specific requirements. Here are some questions to consider when choosing landlord insurance.
What kind of property do you own?
Depending on the kind of property, you may want more specialised coverage. So, a smart place to start is to identify your property type, and then create a list of insurers that might give you the level of coverage you need.
For instance, you might consider yourself as needing one of these:
- Insurance for residential landlords who rent out a single property
- Multi-property insurance covers a portfolio of properties.
- Insurance coverage for student landlords
- Commercial Property Insurance
- Landlord insurance that includes pet damage.
- Non-traditional landlord insurance
Which kind of renters do you want?
You should also think about what kind of renter you want, which is very similar to the sort of property you own. Your tenant type could affect the cost of insurance, so check to see whether your preferred insurer has the necessary forms of coverage. Here are some instances.
Students – Insurers often consider students to be higher-risk renters, so getting landlord insurance may cost you more money. Choosing student-friendly insurance might save you money.
Tenants with pets – Many insurers do not cover pet-related damage. However, if you are a pet-friendly landlord, you should be ready to find an insurance that provides pet damage protection.
Professionals – On the other hand, many landlords find that their insurance policy rates are lower when they rent to professionals.
Department of Social Security tenants You might realise that renting to those who claim housing aid may be more expensive, which is why you need landlord insurance to protect your investment. However, you may be able to get more affordable coverage by working with a specialised insurer.
No tenants – Will your property remain vacant for an extended period of time? Some insurers may provide vacant landlord insurance to address the extra risks that occur when a property is left empty.
How much landlord insurance policy do you need?
The amount of coverage you need depends on your property and its contents, which is why it’s essential to consult your insurance provider.
The level of building insurance will be determined by the property’s rebuild value. This varies from ‘market value’ in that it expressly forecasts how much it would cost to construct the property from the start, which is a crucial factor in determining your home insurance needs.
Building insurance rebuilding cost appraisals, such as reinstatement cost assessments and desk-based e-valuations, can assist in ensuring that your building is properly covered.
The equivalent value of your insured items will determine the amount of contents insurance you need. Once again, this is an estimate of how much it will cost to replace the products, so you must ensure that your estimate is as precise as possible and that you are properly insured.
The majority of insurers also offer other coverage components, such as accidental damage, intentional damage, and rent guarantee, which are important for comprehensive landlord protection.
What type of experience do you want from an insurance provider?
Many landlords base their insurance policy decision heavily on the reputation of their chosen insurance provider. Researching each of your chosen insurers’ degree of experience might help you narrow down the list even more. For example, do they have a crew that is experienced? Have they received any awards? Do they provide a wide variety of coverage?
When is the right time for me to get landlord insurance?
Your mortgage provider will probably insist that you get building insurance from the start if you have one. As a result, buying landlord insurance early on might be a wise move.
Even if you do not have a mortgage, it is still an excellent idea to purchase landlord insurance as soon as possible. Imagine what might happen to your property if you didn’t have the protection that the right insurance policy provides in the event of a flood or fire. Any repairs or rebuilding would be your responsibility. However, having coverage in place from the outset ensures that you are protected against the insured risks from the start.
