A Guide to Insurance for Landlords

Insuring your home is probably a ‘no-brainer’. Certainly, if you have a loan secured on it you’ll have no choice. Your lender will insist. The same goes for a property that you buy for investment purposes although the policy will be specific for the purpose and might cover a wider range of risks.

Here is a short list (but growing all the time) of risks against which you can now insure. They include;

Landlord’s / Buy to Let Buildings Insurance

This is fairly straightforward and, as the name suggests, this sort of policy covers the Landlord of a Buy to Let property for damage to the property caused by fire, accidental damage and, probably malicious damage. This is a basic risk against which you should insure. After all, the losses involved could be catastrophic.

Home Contents Insurance – For Landlords

If the property is unfurnished, then the tenant might want to take their own ‘contents’ insurance. Alternatively, if the Landlord supplies white goods or furnishings, he may wish to cover these through a contents policy.

Rent Guarantee Insurance (RGI)

The Rent Guarentee Insurance policy covers against the risk a Landlord faces in the event that a tenant fails to pay their rent. Generally, this will be a separate policy to your building and contents insurance as it is a more specialist risk – but not always.

Most RGI insurance policies come with legal fee insurance but you may have to pay extra for the additional cover. As legal fees can be substantial, it might be worth considering this option.

Landlord Maintenance, Emergency & Boiler Cover Insurance

As the people that own buy to let property have become more likely to be small landlords or ‘accidental’ landlords, rather than professional corporations, the appeal of fixing costs associated with owning property has become greater.

Public liability Insurance

Public liability cover (PL) typically comes included with most property insurance policies, however, it’s always best to confirm this at the outset.

With the UK becoming more litigious taking insurance to cover you against the risk of a third party injuring themselves on your property is prudent, especially when the property is occupied by a tenant over which you have little control.

As with all insurance, the premium, excess and general terms must all be considered in the round before you can best establish what represents good value for money. However, considering insuring against risk is always going to be sensible, especially when cashflow is tight and the consequences of a large loss are likely to be financially catastrophic.

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