As a landlord, it’s vital that you have the right insurance that covers you and your property against both the common risks that come with any home, and the risks associated with letting to tenants.
All landlord policies come with a certain level of ‘standard’ cover, then there are additional policies you can take out. Some may already be included, but it’s important to check, to make sure you’re covered properly for your particular type of let.
Of course, you should already have your policy in place, but it’s wise to review it periodically. The insurance market is always innovating, and providers regularly review the types of policy they offer, so if you haven’t made any changes to yours in the last few years, it’s worth taking a bit of time to check what you’re covered for and the price of your premium. With costs for landlords constantly on the increase, you need to make savings where you can.
If you have a managing agent, they may well have their own insurance policies. Landlords are sometimes reluctant to simply take something that their agent has a vested interest in promoting, but they can be good value and it could be beneficial to the speed of processing any claim if everything’s ‘under one roof’. Of course, it’s wise to get a few quotes and it may be that you find something more appropriate elsewhere, although there often isn’t a huge difference in price.
If you have houses in multiple occupancy (HMOs), your choice will be limited, as many mainstream providers don’t offer cover for multi-lets. However, as it’s becoming an increasingly popular type of rental, it’s worth keeping your eye on the market for new products.
What should my policy include?
As ‘standard’, your landlord policy typically includes:
- Buildings insurance for rebuild purposes – this is required by your mortgage lender
- Accidental damage cover
- Public liability insurance in case a tenant, contractor or visitor injures themselves in your property.
Many policies also include some of the following, but do check, because it could be advisable to add on or take out separate cover for:
- Malicious damage and theft by tenants. Vandalism is the fourth most common claim made by buy-to-let investors, according to a survey by Simple Landlords, with the average cost of repair ranging from around £1,300 (LSLPS) to nearly £2,000 (Simple Landlords).
- Alternative accommodation, in case your tenants need to be re-homed while any necessary remedial works are carried out on the property
- Rent guarantee insurance. Around 10% of all tenancies fell into arrears over the last year, on average. While not all of these will have resulted in eviction becoming necessary, it’s something that you are likely to come across at some point, so it’s well worth considering, when you look at the cost of the additional premium versus the cost of losing a month or more’s rent. Most policies cover you for 100% of the rent for up to 12 months and also include legal cover if you have to evict the tenant.
You can also get cover for:
- Glass and locks replacement
- Boiler repair or replacement
- Equipment breakdown, if you’re letting with white goods included.
And remember, if you have several properties, putting them all on one ‘portfolio’ insurance policy makes administration easier, with just one premium and one renewal date to remember, and it will reduce the average cost per property.
This information has been provided by our partner Mortgage Advice Bureau. For more information relating to Mortgages or for Mortgage Advice please visit Mortgage Advice Bureau.