What Exactly Is Landlord Insurance?

Landlord Insurance is a type of insurance policy that is specifically designed to help landlords financially protect themselves from some of the common risks associated with renting out their investment property. 

Landlord Insurance is similar to home insurance, with the exception that it is specifically designed to cover rental properties. It is classified into three broad types: buildings insurance, liability insurance, and contents insurance.

Find out what makes one different from the other:
Buildings Insurance

Buildings insurance covers any damage to your property’s structure as well as the cost of rebuilding it if it is totally destroyed.

Buildings insurance policies typically cover the following types of damage; theft, vandalism, malicious damage, lightning, storm, earthquake damage -which may be limited to the building- burst pipes, fire or smoke, oil or water impact caused by accidents.

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Liability Insurance

This type of insurance, also known as public liability insurance, protects you financially against unforeseen accidents (not be used as an excuse to not make the property as safe as possible for tenants).

Liability insurance protects you if, for example, a tenant or a visitor is injured on your property.

Liability insurance policies frequently have extremely high coverage limits; up to millions of pounds, which may be required if you are legally responsible for an accident and must pay compensation, for example.

Contents Insurance

Contents insurance can be purchased separately or as an add-on to building insurance. The amount of contents insurance you’ll require is determined by whether you’re renting out a furnished or unfurnished property.

This type of insurance policy may cover the cost of repairing or replacing fixtures and fittings such as carpets, furniture, and electrical items if they are damaged in a flood, for example. 

Some policies can also be extended to cover items that have been damaged in an accident.

Landlord contents insurance policies only cover items provided by the landlord in the property. Anything belonging to the tenants ( for instance furniture to everyday items will not be covered). In this case, it’s usually a good idea for tenants to get their own insurance as well.

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Lastly, you could explore Rent Guarantee Insurance

Rent guarantee Insurance (also known as tenant default insurance or rent receivable insurance) protects you if your tenant does not pay their rent on time and, in some cases, during any void periods when the property is vacant.

In most cases, rent guarantee insurance should include legal expenses coverage, which covers the costs of repossession and eviction proceedings, as well as lost income from late rent payments, if necessary.

This insurance may be useful for landlords who rely on rental income to cover mortgage payments, but first check with your managing agent (if applicable), as you may already be covered.

Ready to rent out your first property? You should read this. Are you a landlord who needs to find a tenant quickly? This might work for you.

This blog post is not intended to constitute legal or financial advice.