Taking on the role of a landlord comes with a range of responsibilities, and having the right insurance in place is key to protecting your property, tenants and finances in the case of something going wrong. Choosing residential insurance for your rental property won’t provide the right cover, so it’s important to have landlord insurance instead.
Additionally, with upcoming stamp duty changes (SDLT) in April, landlords need to be even more mindful of financial risks. Unexpected property damage or even loss of rental income could make an already costly investment even more expensive. This makes landlord insurance essential!
In this article, we will explore what landlord insurance is and the importance of it, if it’s mandatory, what it covers, the difference between landlord insurance and home insurance, and the types of insurance for landlords that are available.
What is landlord insurance?
Landlord insurance is a type of specialist insurance designed specifically for rental properties. It offers protection for your rental property, and you’re able to tailor it to suit your needs. Landlord insurance provides a safety net that will protect your property in the event of things such as damage, disruption to rental income, or any tenant related issues that may occur.
Is landlord insurance mandatory?
Landlord insurance is highly recommended as unforeseen events can happen at any time. Shockingly, two in five landlords don’t have landlord insurance, leaving their finances at risk should they need to pay for repairs or replacements. If you have a mortgage on your rental property, your lender will likely require you to have building insurance as a condition of the loan. Fortunately, most landlord insurance policies include buildings cover, ensuring your investment is properly protected.
The difference between landlord insurance and home insurance
Choosing home insurance for your rental property instead of landlord insurance means you’re exposing yourself to significant risks. If you’re renting out your property, you will need landlord insurance opposed to home insurance. Home insurance policies exclude or limit coverage for rental properties as there is an increased risk associated with the challenges that come with renting out your property. However, insurance for landlords is made to specifically protect landlords and their rental properties.
Why you should get landlord insurance
Choosing not to get landlord insurance means that you’re exposing yourself to larger expenses down the line, and this is evident in the fact that uninsured landlords risk losing 45% of their annual rental income. Without landlord insurance, you may be liable for the costs of repairs or even rebuilding your rental property in the event of loss. You may even be held accountable for compensating any third parties involved if they’re injured as a result of damages caused by the property.
What does landlord insurance cover?
Standard insurance for landlords covers key areas such as fire, flood, theft, structural damage, fixtures and fittings like kitchens, and items that aren’t owned by the tenant. You can also take out extra cover for things like malicious damage, accidental damage, unpaid rent, legal expenses, public liability, and boiler repair and maintenance.
Types of landlord insurance
Every landlord has different needs, and the type of landlord insurance you go for depends on the type of tenants you have and where your property is located. There are a few different types of insurance for landlords to choose from, and there are a range of optional extras, so you can tailor coverage to your specific needs.
- Buildings insurance: Buildings insurance covers the structure of your rental property and it protects you if there is any structural damage which may be caused by the weather or the event of a fire.
- Contents insurance: This type of insurance covers all the contents within the rental property owned by the landlord e.g. carpets, furniture, appliances etc.
- Landlord liability insurance: Landlord liability insurance provides financial protection to the landlord when a third party suffers an injury as a result of the rental property.
- Loss of income insurance: This insurance covers the landlord in the case of their property becoming uninhabitable.
How Nest GI can help
We have the expertise to guide you through all of the intricacies of landlord insurance. We’ll help you find out what kind of coverage you need, and if you need to add any additional options that align with your specific requirements.
With landlord insurance, you will have that extra peace of mind knowing that you have a safety net to help safeguard your investment. If you want to know more and see how we can help, get in touch with us today!
