What Insurance Do I Need As A Landlord?
Becoming a landlord can be a rewarding investment, but it comes with its responsibilities —chief among them is ensuring that you have the right insurance coverage. In this guide, we’ll explore the types of insurance landlords need, legal requirements, and additional coverage options to protect your investment.
What Insurance Do Landlords Need?
Landlord insurance differs from standard home insurance, providing coverage tailored specifically to the risks associated with renting out property. Here's what you need to know:
Buildings Insurance
Buildings insurance is the cornerstone of any landlord insurance policy. It covers the physical structure of your property against damages caused by events such as fire, flood, storms, and vandalism. If you have a mortgage on your rental property, your lender will likely require you to have this insurance in place.
Contents Insurance
While buildings insurance covers the structure, contents insurance protects the items you own within the property. This is particularly important if you’re renting out a furnished property. Contents insurance can cover anything from furniture to appliances. However, note that this insurance does not cover your tenant’s belongings; they would need their own contents insurance for that.
Liability Insurance
As a landlord, you could be held liable for accidents or injuries that occur on your property. Property owner’s liability insurance protects you against legal costs and compensation claims if a tenant or visitor is injured due to a fault in your property, such as a broken stair or faulty wiring.
Types of Landlord Insurance Available
In addition to the basics, there are several other types of landlord insurance you might consider to ensure comprehensive protection:
Rent Guarantee Insurance
One of the biggest concerns for landlords is ensuring consistent rental income. Rent guarantee insurance provides coverage if your tenant fails to pay their rent. It can also include legal expenses coverage if you need to evict a tenant due to non-payment.
Home Emergency Cover
This insurance is designed to cover the cost of emergency repairs, such as plumbing, heating, or electrical failures. It’s a valuable addition that ensures you can quickly address urgent issues without incurring out-of-pocket expenses.
Legal Expenses Insurance
Legal disputes can be costly and time-consuming. Legal expenses insurance covers the cost of legal advice and representation in disputes related to your property, such as eviction processes or contract disputes with tenants.
Landlord Portfolio Insurance
If you own multiple rental properties, landlord portfolio insurance allows you to cover all your properties under a single policy. This can simplify your insurance management and potentially reduce costs compared to insuring each property separately.
Unoccupied Property Insurance
If your rental property is left unoccupied for an extended period—typically more than 30 consecutive days—standard landlord insurance may not cover risks such as vandalism, theft, or damage. Unoccupied property insurance is designed to protect your investment during these vacant periods. This can be particularly critical if you're renovating between tenants or if the property is on the market.
Alternative Accommodation Insurance
Alternative accommodation insurance covers the cost of rehousing your tenants if your rental property becomes uninhabitable due to an insured event, such as a fire or flood. This coverage ensures that while your property is being repaired, your tenants have somewhere to live, and you’re not left out-of-pocket.
Common Mistakes to Avoid When Choosing Landlord Insurance
Selecting the right insurance can be challenging, and there are several pitfalls that landlords should be wary of:
- Underinsuring Your Property: Ensure your buildings insurance covers the full rebuild cost of your property.
- Ignoring Policy Exclusions: Carefully read the terms and conditions to understand what is and isn’t covered under your policy.
- Overlooking Tenant-Related Risks: Consider additional coverage options like rent guarantee insurance to protect against tenant defaults, as well as other factors such as tenant damage.
Tailored Landlord Insurance from Higos
Landlord insurance is an essential tool for protecting your investment. By understanding the different types of coverage available and the legal considerations, you can make informed decisions that safeguard your property, income, and peace of mind.
At Higos, we understand the unique challenges landlords face more than anyone, and we offer tailored landlord insurance policies to meet your specific needs. Whether you require comprehensive buildings insurance, rent guarantee coverage, or legal expenses insurance, we’ve got you covered.
Get in touch with us today to explore how we can help you protect your rental property with a customised insurance solution. Browse our FAQs online or call us on 01458 270324 for more information and a no-obligation quote.