Landlord Insurance Building & Contents
It’s critical for a landlord to get the proper landlord insurance. Failure to get the correct landlord insurance could prove to be a very costly mistake, so it is imperative that a landlord fully understands what is, and isn’t, covered under the landlord insurance policy in case disaster strikes.
Do I need specialist landlord insurance?
Yes! A standard homeowner property insurance will not cover a rental property. The nature of having a tenant would make any cover void. A tenanted property requires cover from a specialist landlord insurance policy. A household policy offers no cover for buildings, contents or landlord’s (property owner’s) third party liabilities; while the rental property is being let out.
What does landlord insurance actually cover?
Most landlord insurance policies contain two elements. The bulk of the cost relates to the insuring of structure of the building, the rebuild cost.
Alongside this, a landlord insurance policy will typically cover fixtures and fittings, such as: carpets, flooring, kitchens, bathrooms, white goods, light fittings and curtains. This landlord insurance cover is perfectly adequate for those landlords letting out an unfurnished property, though it is worth checking that the policy has some provision for cover against accidental breakage of sanitary fittings and fixed glass such as windows, as these are one of the most common areas of damage in a rental property.
One thing to be aware of with landlord insurance is that theft is only covered if there has been ‘forcible or violent entry or exit’. This therefore effectively excludes the situation where a tenant decides to make off with a landlord’s appliances and kitchen for example and underlines just how important having an adequate rental deposit is. The chances are a landlord insurance policy will not cover theft by a tenant.
It is possible for landlords to add specific contents to their rental property’s policy. Items of furniture, kitchen appliances, etc. However, once again the landlord insurance policy will only cover damage of these items and not theft by the tenant.
Rent Guarantee Insurance
Landlords wanting to protect their income against tenants in arrears and deliberate defaulters, specialist rent guarantee protection can be obtained.
Rent guarantee insurance will make sure landlords get paid even when the tenant defaults, giving them time to consider their options regarding the tenancy, rather than rushing to evict the tenant.
Most rent guarantee policies will require that the landlord has an Assured Shorthold Tenancy Agreement in place, and that the tenant has passed credit and reference checks. Landlords will also be required to take and protect a deposit.
For those landlords who decide to opt for guaranteed rent cover, it’s relatively cheap and can be bought as an add-on to standard landlord insurance or as a separate policy.