Landlords insurance: what does it cover and is it worth it?

 

Buy-to-let property owners and landlords of residential rentals are inevitably exposed to a certain level of risk, and landlords insurance can offer peace of mind.

Of all the things to consider as a buy-to-let landlord to maximise your investment, landlords insurance is a key way of protecting your assets. It isn’t compulsory for landlords to take out specialist insurance, and it’s normally more expensive than standard building and contents cover, which can put some people off – but it’s something all landlords should consider.

Why landlords insurance is important

For most people, their property (or properties) are their biggest and most expensive asset, and for landlords it is an investment that provides some if not all of their income. Renting out a property comes with its own set of risks, whether related to the tenant or external events, and homeowner insurance doesn’t cater for these specific eventualities. What’s more, many insurers simply won’t cover properties that are rented out with a standard, non-landlord policy, leaving the owner fully exposed to risk.

While some may baulk at the added expense of comprehensive cover, when calculating how much could be lost if the tenant stops paying rent or if there’s an expensive and unexpected repair to be done on the property, most will find that it is actually worth the cost.

What can you cover?

Buildings and contents are routinely covered by any property insurance, although sometimes separate buildings insurance will not be necessary on a rental property if it is owned on a leasehold basis and the building is covered through a separate policy with the freeholder, so this is worth checking. Contents cover is only really applicable where the property is rented out furnished or part-furnished, as the tenant must arrange cover for their own possessions if they want to. A number of other options can also be covered with landlords insurance, including:

  • Loss of rental income
  • Accidental or malicious damage or theft
  • Legal expenses
  • Property owners’ liability
  • Eviction costs
  • Cover to rehouse tenants if the property isn’t habitable

How much will I need to pay?

The cost depends on the level of cover you decide to take out, and this depends on your unique situation as a landlord. A good insurance company or a broker will be able to help you decide what to go for.

Some of it might depend on your tenants – most insurers will want to know about them, particularly their employment status as this will help them decide how likely they are to default on payments.

As with any insurance policy, there are ways to make your premiums cheaper. Accurately estimating the rebuild cost of the property can avoid you paying too much, as well as paying a higher voluntary excess in the event of a claim. If the property is unfurnished, there’s no need to take out contents insurance as the tenants will cover their own belongings if they wish to.

While insurers can look favourably on homes with extra security (alarms, extra locks, etc), when it comes to rental property this is slightly more complicated. Including this in a landlords insurance policy would rely on the tenants taking responsibility for the security measures, such as ensuring the alarm is set, and if this wasn’t done the policy could be void.

The key takeaway is that renting out property will never be without its risks, so it’s important to get the right cover to give you peace of mind if something goes wrong.

Our team at BuyAssociation can put you in touch with a buy-to-let landlord insurance specialist, who can help you get the right cover. To find out more, send an enquiry online or call us on +44 (0) 333 123 0320 (UK) or +852 2554 5509 (HK).

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

Landlord insurance

Landlords insurance: what does it cover and is it worth it?

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.