Do I Need Landlord Insurance?

Estimated reading time 6 minutes

Whilst it is not a legal requirement most mortgage providers will insist you have it in place if you buying a buy to let property, and it is well worth having in place just in case something unexpected happens to or in your rental property. Landlord insurance can provide you with peace of mind, protect your property and safeguard your investment.

What does landlord insurance cover?

Landlord insurance is designed to protect you from the risks associate with renting out your property and it therefore provides you with additional protection to that of a regular homeowner’s insurance policy.  The basic landlord policy should always include:

  • Buildings Insurance which covers and repairs if there is any damage to the structure of the building. It will usually cover damage by events such as fire, flooding, subsidence, theft or vandalism.
  • You will also need Property Owners’ Liability Insurance which protects you against claim if someone injures themselves on your property.  
  • You can then add to the standard insurance with Contents Cover and Accidental Damage Cover these add-on’s protect against the cost of replacing and repairing damages to fixtures, furnishings and fittings throughout the tenancy.
  • Another potential add on is Loss of Rent Insurance, which pays out if the property becomes uninhabitable due to fire or flood and you lose out on rent as a result.
  • Rent Guarantee Insurance is another layer of protection in case your tenant defaults on rent payments. 

What to consider when taking out landlord insurance?

There are several factors to take into account when considering what policy to take out:

Policy coverage

You want to ensure the policy covers your specific needs like those mentioned above, building insurance, liability protection, loss of rent, contents insurance, and any other features you think are necessary.

Rebuilding costs

It is very important to accurately assess the rebuilding cost of your property to ensure your policy covers it sufficiently. Underinsurance can result in you being unable to afford to rebuild the property in the event of a claim.

Tenant type

It is important to let your insurer know who you may be renting to as different insurers may have specific requirements or limitations regarding tenant types. For example, student or DSS (Department of Social Security) tenants may require different insurance considerations.

Excess

Check your excess amount as this is the sum you will have pay towards a claim and whilst a higher excess may reduce your premium it could turn into a financial burden if you need to make a claim.

Policy exclusions

Always read the policy terms and conditions carefully to understand so that you are fully aware of any exclusions or limitations. Certain high-risk situations or property features may not be covered.

Landlord obligations

It is imperative that you fulfil all your legal obligations as a landlord, such as conducting regular safety checks (e.g., gas and electrical safety checks), maintaining the property in good condition, and complying with relevant regulations as non-compliance could affect your insurance coverage.

How much is landlord insurance?

The cost of your Landlord Insurance will depend on whether you have made previous claims, what level of cover you choose the more add-ons and cover you request the greater the price.  The location of the property is a determining factor as if your property is in a high crime area you will likely have to pay more for your insurance. The age and size of your buy-to-let property will affect the cost of maintenance and repairs that would need to be carried out should you make a claim. The construction of the building and likely cost of rebuilding will have impact. The cost of Landlord Insurance will also be impacted by your tenants for example students are considered higher risk than professionals. The lower the level of excess you are willing to pay will the expensive the quote will be.

How to reduce the cost of landlord insurance

  1. Install Good Security to make your property less attractive to thieves, this can be strong locks, burglar alarms and cctv to name a few.
  2. Increase Your Excess – the more you are willing to pay towards a claim the lower the premium quote will be.
  3. Keep the Rental Property Occupied – if your property is empty for a long period the property will be viewed as higher risk by the insurance companies.
  4. Rent to Professionals – whilst you can of course rent to students as they are deemed a higher risk if you want to reduce the cost of Landlord Insurance renting your property to a professional is a better option.
  5. Combine Landlord Policies – packaging building, contents, liability etc together in one policy can offer better value for money.
  6. Compare Polices – it is always worth comparing quotes from different companies, just make sure you are comparing the same cover.

Gaffsy says. … Landlord Insurance is a valuable tool for protecting your buy-to-let investment and for reducing the risks associated with renting out your property. By assessing your requirements and purchasing a policy with suitable coverage, you will have peace of mind knowing that your property and finances are safeguarded in the event of unexpected events or tenant issues. Before purchasing your policy do consult with insurance providers and compare policies, enabling you to be better equipped in making a decision on which landlord policy satisfies your needs.

Are you a landlord with tenants in situ?

Know that if you are a Landlord with tenants in situ Gaffsy specialises in buying houses with squatters, flats with tenants in arrears and properties with tenants in situ. If you are selling a buy to let with problem tenants  Gaffsy will make you a cash offer for any property regardless of the tenancy type.

Do you have a buy to let to sell?

Gaffsy as a genuine cash buyer will purchase un-mortgageable, uninhabitable properties those with fire damage, Japanese knotweed, subsidence, cladding, etc. We will buy any flat, house, buy-to-let in any condition as we do not require finance to make the purchase.

Do you need a quick house sale?

Gaffsy can provide you with a quick flat sale and purchase your property in a matter of days. We buy any property, quickly, hassle-free and for cash.

Want to receive the full cash amount offered?

Gaffsy doesn’t charge any fees and will cover your legal costs which means you will receive the full cash amount offered for your rental property. Contact us today for your free no-obligation cash offer

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