Insurance for Landlords

If you are renting out buy-to-let property, then normal home insurance is not sufficient.

If you are renting out buy-to-let property, then normal home insurance is not sufficient cover for your needs.

Many insurance companies have special products for landlords that come as a combined policy –

Buildings cover
Landlords contents insurance
Landlords liability insurance
Legal cover
Rent guarantee cover
Some also come with optional add-ons that can be cost effective –

Many landlords take the full package as letting property allows insurance costs to be set off against profits as a business expense.

Buildings cover is the same for landlords as any other homeowner and looks after the rebuild or repair costs of damage to the property’s structure.

Landlord’s contents is generally quite cheap as most properties are let unfurnished, so have minimal contents like carpets, curtains and maybe a fridge or washing machine.

Liability insurance is important because it protects the landlord against claims for death or injury of a person at the rented property.

Legal cover deals with the costs of evicting tenants and is often wrapped in with rent guaranteed cover that pays the rent for a set period if the tenant fails to do so.

Points to watch

Don’t invalidate your cover by failing to meet some basic legal requirements:

Always have a valid gas safety certificate and electrical safety certificate
Fit smoke and carbon monoxide detectors
If you have legal or rent guarantee cover, make sure your tenants are referenced and credit checked before you sign any tenancy agreement
Follow the tenancy protection scheme rules or you may find you cannot take action to evict a bad tenant

These points are on top of the usual tips about maintaining the property in good order, fitting security lights and good locks and dealing with maintenance problems as they arise.

When you take out a buy-to-let mortgage, the lender will probably try and sell you bundled buildings and landlords insurance. This is often a false economy, because the same or better cover is generally available elsewhere for less money.

The mortgage lender can make it a condition of the loan that you must have adequate insurance, but they cannot stipulate you cannot shop around and have to buy the insurance from them.

Insuring tenant’s possessions

Don’t worry about insuring the tenant’s possessions, that’s their responsibility and the letting agent, if you have one, or plenty of insurance companies will help them out.

Letting flats

Don’t forget if you are letting flats or apartments, the buildings insurance is generally taken care of by the management company and the cost included in your service charge.

Unmortgaged properties

If you have raised the cash to buy your buy-to-let property outright, then still take out Landlords insurance to protect the value of your asset in case something should go wrong.