Understanding the Different Types of Landlord Insurance

As we enter the New Year there are many things that you should look to review as a landlord or homeowner. One big area that can often cause confusion, especially for first-time property owners, is understanding the different types of landlord insurance. There are a few different types of landlord insurance, and now is a good time to consider what type of insurance you need and whether you can change to a better insurance policy during the New Year. Landlord insurance is insurance for a property that you own and rent out to tenants. There are several options open to you so below we take a look at the different types of landlord insurance so you can make an informed decision.

The Different Types of Landlord Insurance

Buildings Insurance

Putting the state of your property in the hands of your tenants can be worrying, especially for those who have not owned a rental property before. If there is any damage to the structure of the property, as the landlord, you can be liable to pay any associated repair costs. Buildings insurance covers the financial cost of repairing any damage that occurs to the structure of the building, or to any built-in features and appliances that you have added to the property.

In the event of damage, you are covered for the repair cost including:

  • The roof of the property

  • The floors throughout the property

  • All internal and external walls to the property

  • Any fitted or permanent fixtures (such as a fitted kitchen)

There are many different ways in which a building might become damaged, whether intentionally or as part of a weather emergency or event. Your building could become damaged from flooding, through an explosion, fire or arson, storm damage, or structural damage from falling trees.

Every buildings insurance policy will be different in its specific detail, so it is vital that you choose the correct policy for your specific needs. The buildings insurance is to help you rebuild or repair the structural elements of the property and does not cover items that can be removed from a property such as sofas and beds. For removable items you will need contents insurance, but sometimes these two insurance premiums are grouped together so make sure you check for the best deal.

Contents Insurance

Contents insurance deals with the items within the home, as opposed to the structural integrity of the property dealt with in buildings insurance. Content policies cover items such as furniture throughout the home, curtains and carpets, and other items that may have been damaged beyond your control.

To think about what items should be considered part of a contents policy, think about all the items within the property that you would take with you when you move home. As a landlord you do not have to have contents insurance and it is more likely that your tenants would. However, if there are certain items of furniture that you provide, you could have indemnity insurance that covers items but takes into account wear and tear, offering a lower pay-out over time. The alternative is a new-for-old policy which replaces items with a brand new item, but this can be more expensive.

Depending on what type of policy you take out, you can add additional contents insurance to cover accidental damage, home emergency cover to cover work on burst pipes, broken windows, or infestations, or legal expenses cover to protect against disagreements with tradespeople, for example, and tenants injured in the property.

Rental Protection Insurance

This type of insurance policy protects a landlord in the event of damage to the property leading to an unexpected ending of a tenancy agreement (whether temporarily or permanently) or for those fallow months where you are unable to find a new tenant to occupy your property. 

When the unexpected happens and your rental property is empty for longer periods than you would wish, this type of landlord insurance can help cover the cost of any mortgage, cover any legal costs related to disputes with tenants, or help cover your missed rent while your property is vacant. It can be a good option to give you extra peace of mind where a void period would be concerning for cash flow.

Liability Insurance

Liability insurance is very important as it covers legal costs in a variety of circumstances. It can be included in other types of landlord insurance above or purchased separately. This type of insurance covers you in the event of an injury claim or damage claim related to your property. 

An example could be a tenant or tradesperson tripping in your building and suffering an injury. Liability insurance is designed to cover the cost of any court and legal costs, as well as any compensation that is paid out to the claimant. A landlord does not have to have public liability insurance, but it is often included as standard within many landlord insurance policies.

At Residential Estates we understand the property market, providing expert advice and insight to our customers about all aspects of owning a property, including advice on the different types of landlord insurance. For more information please feel free to contact us today on 01244 343 355 or sales@residential-estates.co.uk. 

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