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Letting property can be a profitable business, but as a landlord you'll know it isn't without its risks. The fact is that investing in the market is a big financial commitment, so it's likely that you'll want suitable financial cover in place.

Whether you’re a commercial or domestic landlord, a property developer or buy to let investor, there are a number of different risks that could threaten your assets. That's where landlord insurance comes in.

What is landlord insurance?

Strictly speaking, landlord insurance – also known as buy to let insurance and property owners insurance – isn’t technically a type of insurance itself, but rather a collection of different forms of cover that landlords can purchase to help protect their assets against risk. A landlord insurance policy comprises these various types.

As each landlord’s assets and property portfolio will be different, it stands to reason that each landlord will require different protection from their insurance. This is why it’s often beneficial for landlords to seek a bespoke insurance policy tailored to their exact needs, as this will help to ensure that they don’t leave themselves vulnerable.

What does landlord insurance cover?

As stated, it’s likely that different landlords will require different forms of protection for their property. However, a typical residential landlord insurance policy will provide cover for the following key areas:

Landlord buildings insurance

As a landlord, your property is one of your most important assets, and as such you’ll want to protect it against the things that threaten its security. Landlord buildings insurance can protect the bricks and mortar of your rental property – and sometimes permanent fixtures such as kitchen cabinets – against damage, loss and theft.

If you are looking for a prices on insurance to protect you when renting out commercial properties, such as an office, click the link to compare office insurance quotes. 

 

Landlord liability insurance

If someone was injured, or their possessions were damaged, due to a fault with your rental property, then you could be held liable. In this unfortunate situation, having the right liability insurance in place could help you to pay for a legal defence, and third party compensation if necessary, so that you aren’t left in a difficult financial position.

Landlord contents insurance

If the contents of your properties are lost, stolen or damaged this policy can cover the cost of replacing them. This can be particularly valuable if you let furnished properties, as you have the assurance that those furnishings are protected. It’s worth noting, however, that tenants’ own possessions are typically not included in this cover.

Landlord legal cover

This type of insurance can cover the cost of legal proceedings in the event of any disputes over your tenancy agreements. In this situation, there’s no guarantee that you would be able to afford the cost of a legal defence – or potential compensation that may need to be paid – which is why this cover can be so beneficial.

Additional landlord covers

Of course, there’s a good chance that you may also want to include extra forms of protection in your buy to let insurance policy, to safeguard wider aspects of your business. Some of these additional forms of cover could include:

  • Accidental damage insurance for landlordsan extension that can be added onto buildings or contents insurance, accidental damage insurance could protect against damage or loss of function caused by events such as unintentional breakage or spillage.
  • Home emergencies cover - can compensate the cost of emergency repairs to your property’s supply of gas, electricity, heating or water, and can include pest infections, glazing and security.
  • Impact cover: could provide you with financial help if structural damage is caused to your property due to vehicles and falling trees, animals, aircrafts and masts.

Alternative accommodation insurance for landlords

Alternative accommodation insurance for landlords is a form of cover that provides protection in case a property you let becomes uninhabitable resulting in you needing to provide an alternative arrangement for your tenants. 

It can help to cover the costs you may incur in providing temporary accommodation. This form of insurance can be combined to form a part of landlord insurance or can be chosen as an add-on. 

Providing alternative accommodation to tenants if a property becomes uninhabitable is not necessarily a requirement for a landlord. However, if your tenancy agreement details that you’re obliged to provide tenants with a place to stay in such circumstances, it is recommended to opt for this form of insurance. 

When can you claim on alternative accommodation insurance?

There may be damage caused to your property by unforeseen events such as fire, flooding, or other natural disasters that could result in your property being uninhabitable for your tenants. However, damage to property as a result of tampering or intentional acts of destruction is usually not covered under this policy.

As a landlord, you may choose to specify other risks you’d like to guard against if you believe they could compromise your property’s suitability for tenants. For example, you might look to cover the central heating, if you believe that loss of heating during winter would result in your property being uninhabitable. 

How alternative accommodation insurance works during a claim

In the event that you make a claim on your alternative accommodation insurance, this policy provides cover for the expenses incurred to provide an alternative place for your tenants to stay until the damage is repaired. In most situations, the type of accommodation the tenant moves into, must reasonably match the conditions of their rented property. For example, if your property is a two bedroom detached house, the new stay option for the tenant must be a similar one. This is to ensure that the rent for the new property is relatively similar to the rent you’re currently charging tenants.

Sometimes, your property may experience damage that can be fixed within a short period of time. In such instances, your tenants may prefer to stay in a hotel or share accommodation with a friend or family member. In the case of a hotel stay, this policy covers lodging charges for a room of similar value to your property.

If your tenants are staying with a friend or family member, expenses incurred by the hosts because of additional members in the house may be covered. If the stay lasts for more than a month, an amount equal to or lesser than the original rent amount may be covered depending on their property conditions.

There are a few insurance providers who also cover expenses incurred on accommodation of pets belonging to your tenants during such circumstances. This largely depends on the clauses included in your policy at the time of purchase.

Do I need landlord insurance?

There's little doubt that you could benefit from the security provided by a landlord insurance policy, but ultimately, it's up to you to decide if you think it's worth investing in the protection.

The breadth of the cover that you are offered by an insurer will often depend on your individual circumstances and requirements. Much will also depend on your attitude towards risk. You may find that there are some unexpected costs that you can cover yourself, while more dramatic events, though less likely, could have much more significant financial implications.

Commercial landlords

If you're a commercial landlord - namely if you let property which is used by a business - then the cover you'll need will vary slightly.

This means that commercial property insurance will be necessary if you're looking to protect the building, and it's important to remember that some of the risks associated with business occupants are naturally different to those you'd face with domestic tenants. The potential pitfalls can also vary depending on the nature of the business - or businesses - you're letting to.

Looking to rent an office? Click the link for cheap office insurance quotes.

How much does landlord insurance cost?

As mentioned above, the exact types and extent of cover that you take out will probably differ from that of another landlord. Naturally, this can affect the cost of your landlord insurance, as the more comprehensive your insurance package, the higher the price is likely to be. To ensure that your striking the right balance between cost and cover, it can help to run a thorough comparison of landlord insurance quotes before switching. 

Other factors that can influence the cost of your property owner’s insurance package include:

  • The postcode area
  • Your insurance claims history
  • The building and rent sum insured.

 This makes it difficult to predict how much any landlord’s overall insurance policy will cost – without a proper analysis of their needs – as prices can vary greatly.

The best way to find out how much buy to let insurance would be for your landlord business is to obtain a quote from an insurance provider or broker.

Cheap landlord insurance cover

To get a bespoke quote for your landlord insurance needs, get in touch with Make It Cheaper today. Our UK based insurance experts make it quick and easy for you to get a cheap landlord insurance quote – leaving you free to get back to running your business.

For more information on additional forms of landlord cover, such as unoccupied commercial property insurance, click the link or call us on the number above. 

Landlord insurance versus home insurance - What's the difference?

If you are a landlord renting out one or more houses, you’re likely to be aware that your insurance needs are different to those of a typical homeowner. 

While home insurance is designed for an owner’s primary residence, landlord insurance is intended for properties that the owner plans to let to tenants. 

Due to the fact that you have less control over the treatment and condition of a property that you don’t inhabit, insurance can prove to be vital if your properties suffer from damage or theft. The below forms of cover are likely to form a central part of your landlord insurance policy. 

  • Public and propery owners' liability cover:
    If a tenant gets injured as a result of an accident within your property – for example, due to a fault with loose fixtures or an electrical hazard - you may be held responsible for the harm they’ve suffered. In extreme cases, you may need to provide compensation for their medical expenses and the loss of earnings your tenant faces if they’re unable to carry on with their professional duties as a result of the injury. Property owners’ liability cover can help to pay these expenses.

    Similarly, suppose a member of the public gets injured following an accident linked to your property or premises –most likely while visiting one of your tenants. In such instances, public liability cover can help to bear the expenses you may incur, including hospital treatment.
  • Accidental damage:
    If your property structure or its contents (that were originally a part of the property) suffer damage as a result of an accident or an unexpected event, this insurance can cover the cost of repairs or replacements.
  • Legal cover:
    This feature is exclusive to landlords and not essential if you are looking for conventional home insurance. As a landlord, there are chances that you may get involved in a legal dispute with your tenant – commonly over tenancy deposits or late rent payments. Legal fees can be expensive and may prove costly if this cover is not included in your insurance policy.
  • Alternative accommodation cover:
    In the event that unforeseen events result in your property becoming uninhabitable, this cover can cover the cost of finding, and paying for alternative accommodation for your tenants during the time it takes to fix the damage.  
  • Landlord contents:
    If you let a fully or partially furnished property, landlord contents cover can pay for repairs or replacements in the event that these items are damaged or stolen. This may also cover accidental damage to the glass sections of windows, doors, cabinets or  fixtures such as lighting, plumbing and locks..
  • Loss of rent:
    This insures against certain events that can result in a landlord missing out on rental income. For instance, if a fire or other unexpected event damaged your property to the extent that it became uninhabitable for tenants, the insurance could cover the rental income a landlord misses out on during the time it takes to carry out sufficient repairs.

Click the 'get a quote' button below to get your no obligation quote. 

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