Being a property landlord can be a highly lucrative way to earn a living and it can seem, for the most part, like an easy way to do so as well. However, when things don’t go your way, you need to ensure that your interests are protected and the best way to do this is to make sure that you’ve got suitable landlord insurance from a reputable provider.
Just as important as having landlord insurance is having it with the right provider, as well as having the right policy that covers you comprehensively. Here we look at some pointers to help you make sure you make the right decisions when getting yours.
It’s not against the law not to have it
The first thing to point out is that it’s not against the law not to have landlord insurance, but you will leave yourself liable if you don’t get some. Specialist landlord insurance is usually required, as standard buildings & contents insurance doesn’t cover you for things that go wrong when you have tenants.
The reason for this is that insurance providers see 3rd party tenants as an increased risk, as you’re more likely to make a claim. Conversely, if you’re renting out a flat in a block of flats, you might need the buildings cover element, as the freeholder of the block may have it – meaning you don’t have to. This is by no means guaranteed, so you must check if there’s any ambiguity in your mind.
There are varying levels of cover
Essentially, landlord insurance covers you for all the same things that standard home buildings and contents insurance does, but with added extras for the kind of things that you might encounter as a property landlord. Of course, the more you cover yourself for, the more it is likely to cost you, but this is something you can weigh up and determine for yourself.
For example, in addition to protecting yourself for any repairs to the structure of your property and the contents housed within, you can also protect yourself against:
- Loss of rent – should your tenant stop paying or move out without notice
- The cost of any legal expenses incurred in disputes with tenants
- Any intentional theft or damage caused by your tenants
- The costs involved in evicting squatters who set up home in your property
- Cover for public liability i.e. if someone living in or visiting your property gets injured and tries to sue you
Some of these elements may come as part of your policy, but you should be sure about what you’re covered against by asking specifically. Don’t assume that you’re covered for something specific, as you don’t want to find out that you’re not just when you need it.
It’s also important to mention at this point that if you rent an unfurnished property out, your buildings and contents cover won’t cover the possessions of the people living in your house, so they need to take some out for themselves.
The kind of tenants you have matters
You’ll likely find when applying for your landlord insurance that you’ll be asked about which type of people you’re going to be renting your property out to. Even if you’re applying online, you’re probably going to get asked to divulge this information. The main categories you’ll get to choose from will typically involve things like:
- Students
- People receiving housing benefit
- The self-employed
- Retired people
- Asylum seekers
- Unemployed
As you would expect, there are varying degrees of risk at play here as far as the landlord insurance companies are concerned, which is why this is a factor that can affect how much you pay. This is will be particularly evident if you want to be covered for non-payment of rent when letting your home out to someone who’s unemployed or students for example. You’ll also find that some insurers won’t even offer certain types of coverage to certain groups of tenants, so you may have to shop around to get exactly what you’re looking for.
Extra cover is required if your property is vacant
Another aspect you’ll need to pay attention to as a landlord is whether your property is going to be empty for 30 days or more. Typically speaking, you’ll find that most landlord insurance policies will cover you for claims made when your property is vacant for a short time, but if it’s going to be an extended period, you’ll need to get yourself an extra layer of cover. If you don’t and something happens, you’ll be paying the cost out of your own pocket. Whether as part of the same policy or as separate ‘unoccupied property insurance’ policy with a different provider, it’s something that you’re going to need.
In summary
You can’t leave things to chance when you’re a property landlord, as it can literally be your livelihood that’s on the line. You need to be covered for all of the possibilities that might occur when renting out a property because if you don’t and something happens, it can leave you not only with a large bill but with an asset that you can’t then rent out for an extended period.
Also, not all policies are the same and whilst it might be easy to assume that you’re covered for every eventuality, you should ensure to nail down exactly what you are and aren’t covered for. It’s best not to scrimp on your landlord insurance too, because if you need help with the legal costs of problems like getting rid of unwanted squatters, you’ll be glad you spent those extra few pounds per month to cover yourself for it.
Consider every eventuality and you won’t go far wrong.
