Whether you’re a first-time landlord or an experienced property investor, it’s vital that you understand the importance of insurance when it comes to renting out a property. This blog aims to help you learn more about the different types of insurance available to landlords in the UK and the potential risks associated with renting out a property without the right cover.
What Is Landlord’s Insurance?
Landlord’s insurance can refer to a variety of different types of insurance policies, including:
1. Building Insurance: Building insurance covers the physical structure of the rental property, such as the walls, floors, and roof, as well as any permanent fixtures or fittings. This type of insurance is designed to protect landlords from the financial consequences of unexpected events such as fires, floods, storms, or other natural disasters.
The policy will typically cover the cost of repair or rebuilding the rental property, as well as any other damage caused by the event.
2. Contents Insurance: Contents insurance is a type of landlord insurance that covers the contents of the rental property, such as furniture, appliances, electronics, and other items. If there is a theft, fire, or other damage, the policy will typically cover the cost of replacing the items.
This type of insurance is especially important for landlords who rent out furnished properties, as they could be liable for the cost of replacing any damaged or stolen items.
3. Liability Insurance: Liability insurance covers any legal costs related to a tenant’s injury or property damage that occurred on the rental property. This type of insurance is designed to protect landlords from the financial consequences of being held liable for an accident or incident.
4. Rent Guarantee insurance: Rent guarantee insurance covers the cost of lost rental income due to a tenant’s failure to pay their rent. This type of coverage is typically offered as part of a comprehensive landlord insurance package, but it can also be purchased as a standalone policy in some cases.
5. Legal Expenses Insurance: Legal expenses insurance provides landlords with protection against legal costs related to any disputes with their tenants.
This type of coverage is typically included in a comprehensive landlord insurance package, but it can also be purchased as a standalone policy in some cases. The coverage usually covers the cost of lawyers and court costs associated with any legal disputes with tenants, such as eviction proceedings, property damage claims, and disputes over tenant rights.
Do Landlords Need Contents Insurance?
As most rental properties are unfurnished, we tend to advise Landlords that contents insurance is not generally required, however, if you are renting a furnished property it is vital that you take out contents insurance.
It is important for landlords of furnished properties to have this type of insurance because it can cover the cost of replacing items that are damaged or stolen in the event of an incident. Contents insurance can also pay for the cost of repairing items if they are damaged due to wear and tear.
Obtaining Landlord Insurance
1. Identifying Insurance Providers: To get landlord insurance, the first step is to identify insurance providers that offer landlord insurance. You can look online to research and compare different companies, or you can ask friends and family for recommendations. It is important to check the reviews of the company to ensure that they provide quality service and that their policies are reliable.
2. Comparing Different Policies: After identifying a few insurance providers, you will need to compare their policies to determine which one best suits your needs.
3. Calculating the Costs: Once you have identified the right policy for you, the next step is to calculate the costs. You need to consider the premiums, deductibles, and other fees associated with the policy. You should also factor in the cost of any additional coverage you may need, such as flood coverage, whilst also considering if you will need to make any additional payments if you need to make a claim. Once you have calculated the total cost, you can decide if the policy suits your requirements.
Summary
In summary, Belvoir recommends doing your research and putting in place a collection of policies or a completely comprehensive policy that covers you from every angle as a landlord. Being insured in every aspect can mean that any incidents can be resolved swiftly and efficiently whilst ensuring you as a landlord are not out of pocket.
Belvoir can advise and provide rent guarantee insurance. Get in touch today to find out more information.
