When taking out house insurance for a property that is rented out to others, landlords must ensure they have selected the correct policy. Regular home insurance, for buildings that are inhabited by the policy holder, will not cover factors that are only relevant to rented properties, such as loss of rent, or malicious damage by tenants.
The most basic landlord insurance, also known as buy-to-let insurance, is essentially just buildings and contents cover, but there are many other aspects you may wish to include in your policy. The level of cover you require will vary depending on your preferences and individual circumstances, although some of the extra features you may wish to consider are outlined below.
Rental income protection ensures you don’t lose out on receiving rent payments if a tenant has to vacate the property for a period of time, for example if repair work is being carried out. There may also be the option of a rental guarantee to provide for a scenario in which the tenants refuse to pay rent. This level of cover enables you to protect your income.
Liability insurance will cover a landlord if a tenant suffers damage to their person or property due to negligence on the part of the landlord. If your property is in a good state of repair then it is unlikely that you will be liable, but this cover will protect you against a wide range of potentially unforeseen circumstances.
Legal cover will take care of the majority of legal fees in the event that you have to take a tenant to court. Note that the level of cover will vary between policy providers, and there may be some fees for which you will not be covered even if you take out this type of insurance.
As with normal household insurance, you must be certain that the amount for which your building and contents are insured is sufficient. If the cost of rebuilding a property is not covered by the buildings insurance, you could be left out of pocket, for example, if a fire destroys the property. You should also note whether your policy includes accidental damage and/or intentional damage to property and to contents. Remember that you cannot claim for incidents that are not covered in your policy.
Before you agree to take out any insurance, always check with a variety of providers to find your ideal policy at the lowest price.