If you’re planning to rent out a property, there are many different types of landlord insurance to consider. What should you look for in a policy? It partly depends upon the risks you’re exposed to. This guide will explain what to look for in a landlord insurance policy to help ensure you’re getting the best cover at the cheapest cost.
A basic landlord insurance policy should include five main types of coverage:
- Landlord building insurance
- Landlord contents insurance
- Landlord public liability insurance
- Legal expenses cover for landlords
- Home emergency
Below we explain what these each cover and what to look for in a plan.
Landlord building and contents insurance
Landlord building and contents insurance protects a rented building and its contents from events like fire, flood, theft, explosion and vandalism. The ”buildings” aspect of cover protects the structure, that is the walls, roof, doors, windows, wooden or tile flooring, fitted kitchens and baths, plumbing and electrics, and more. The “contents” aspect of the cover protects the furniture, curtains, carpets, appliances and other furnishings that are not permanently fixed to the building.
When buying building and contents insurance, a landlord should look for features such as a 24-hour claims line, a low excess, accidental damage (although this might cost extra), cover for lost keys, emergency alternative accommodation (in case a property is made uninhabitable due to an emergency like a flood or break-in) and new-for-old cover.
Landlord public liability insurance
Landlords also need to hold public liability insurance to protect against a tenant or other visitor to the property being injured and suing. Broadly speaking, public liability insurance protects against claims made by third parties that you are responsible for injury or property damage. For example, if a tenant trips on a loose carpet fitting and falls, injuring themselves, they could sue you, the property owner. Landlord public liability insurance is also called property owners’ liability insurance.
Public liability insurance covers both legal fees to defend yourself as well as any compensation you’re required to pay to an injured party. With public liability claims commonly surpassing £10,000, this is a type of protection that is well worth the money. To be fair there is not a lot of variability in public liability insurance plans, but look for policies that have a 24/7 helpline because disaster can strike at any time of the day or night. While you might need to pay an extra premium for public liability insurance, it is often included in comprehensive landlord insurance packages.
Landlord legal cover
Legal expenses cover comes to the rescue when a landlord needs access to legal experts in case of a dispute such as failure to pay or eviction. The cover will not only refer you to a suitable legal team, it will also pay legal costs to deal with the issue, such as solicitor or court fees.
A good landlord legal policy will provide 24/7 access to dedicated helplines to advise a landlord through any tenant or contract disputes, and there are some key features to look for. In particular, a landlord legal plan should cover:
- Tax investigations
- Recovery of rent arrears if a tenant doesn’t pay
- Repossession if there are legal grounds to evict a tenant
- Property damage, nuisance and trespass
- Prosecution defence if a landlord is accused of wrongdoing
- Contract disputes
Landlord Home Emergency
Not all home emergency plans are the same; in fact, there is a wide variety in the types of cover you get from one company to the next, or from one level of cover to the next. If you want a no-hassle plan that offers a high level of protection against home emergencies, look for a plan that covers the following problems:
- Boiler breakdown
- Central heating failure
- Loss of hot water
- Electrical failure
- Block drains
- Burst pipes
- Storm damage to roofs
- Securing broken doors and windows
- Lost keys
- Pest infestations
There are features to look for as a landlord that can be of benefit to both you and your tenant. For example, some landlord home emergency plans permit the tenant to call with a problem, which can save time and headache for the landlord and speed up the resolution of a problem. Some plans might also cover temporary accommodation for your tenant if the property is temporarily uninhabitable due to an emergency. The most expensive plans might also cover an annual boiler service and Gas Safety Certificate (CP12).
In addition to add-on coverages like accidental damage, legal expenses and home emergency cover, you may also want to consider loss of rental income or rent guarantee insurance. The first covers certain situations where your property has sustained physical damage and you can’t rent it out as a result; the second covers non-payment by tenants.
Landlord Insurance Discounts
To save money on landlord insurance, make sure you compare prices from multiple insurers before committing to a policy. Prices can vary significantly from one insurer to the next, so failing to shop around can be very costly indeed. In particular, the cost of add-on features like home emergency and accidental damage can be highly variable; and in some cases paying for a top-tier plan can be cheaper than buying a lower-tier plan and paying for optional add-ons.