A Guide to Landlord Buy-to-Let Insurance
There was a time when Landlord Insurance was relatively simple. You either opted for a policy that covered the physical property against damages i.e. building insurance, or a policy that covered both property and contents against damages.
In a nutshell, landlords with furnished properties typically opt for policies with building and contents cover, while everyone else did without. Sounds pretty simple...
Perhaps up until now you were under the impression it was still that basic. Those options are still available, and they’re still undoubtedly the most common policies landlords opt for - and arguably need. However, in today’s thriving Buy-to-Let market, there a few more types of insurance available for landlords that covers more than just the basics,
Types of Landlord insurance products available
I have made a list of the different types of insurances available that as a landlord you may wish to consider:
Many of the generic landlord insurance policies actually cover a little bit of everything. For example, most landlord policies cover building damage and legal fees (usually to a specified amount). On the other hand, some policies are completely ring-fenced to a single, specific type of insurance (e.g. you may have a policy that ONLY covers building damage and nothing else), so my advice is to break down each policy into the various parts and make your decision accordingly.
Landlord insurance policies are very much like any other type of insurance. You can have a policy that covers the basics, but you can also add extra, more specific items for greater protection. It really boils down to how much protection you want and how much you’re willing to pay for it.
By discussing your needs and property features with your insurance broker they will be able to compile a suitable insurance package for you, and ensure you get the best deal.
I think it is always best to talk direct to an insurance broker who specialises in landlord and property insurance before taking out any policy. By discussing your needs and property features with them, they will be able to compile the most suitable insurance package for your specific needs.
This particular insurance premium is vital for landlords.
A landlord building insurance policy covers your property from any damage, which may include fire, vandalism or malicious damage, natural disasters, and subsidence etc.
There is a broad range of policies available on the market, so it’s important to use due diligence when choosing the best policy to suit your needs. Speaking to an insurance broker will provide you with the assistance and guidance you need.
Landlord Contents Insurance
Landlord building insurance is considered essential, but content cover is considered to be a more optional extra. Whether it’s suitable for you depends a lot on the contents of the property you’re letting.
If your property is “furnished” then it’s worth considering contents insurance. Additionally, if white goods (cooker, oven, fridge, freezer.etc) are provided as part of the let, then it also might be worth considering.
If the property is unfurnished, then it’s ultimately down to the tenant to get his/her own policy to insure their personal belongings. Landlords are NOT obligated to insure the tenants’ possessions.
You can usually get contents insurance added on to a landlord package rather than arranging separate policies or insurers.
For more information, go to the Landlord Building & Content Insurance Guide.
Rent Guarantee Insurance
This policy protects landlords against loss of rent. It’s most commonly relied on when tenants fall into arrears and are unable to pay rent, or simply refuse to pay rent (for whatever reason). In this instance, the insurance company will cover the rent, or at least a percentage of it, depending on your policy.
This type of insurance has nothing to do with the property or the contents. It only insures against rental loss.
Landlord Maintenance & Emergency Insurance
These are relatively new policies in the insurance market. However, they’re becoming increasingly popular with landlords.
This type of policy generally covers gas and electrical breakdowns in Buy-to-Let properties. You pay a settled amount per month, and the policy provider will attend to gas and electricity related issues within 24 hours. This can be a very useful product, particularly for old houses with old fittings that are prone to frequent breakdowns.
Legal Expenses Insurance
Most Landlord and Emergency Insurance policies come with legal expenses insurance as part of a package. However, if you do not wish to take out any additional premiums, you can purchase legal expenses individually.
Landlord legal expenses insurance covers a range of legal expenses. For example, if you’re dealing with a tenant that falls into arrears and is reluctant to vacate, the legal expenses to evict the tenant can quickly escalate, leading to a rather costly sum.
Public liability Insurance
Public liability cover typically comes included with most insurance policies. However, it’s better to be made aware of what it means so you can ask the question when you’re getting your insurance policy.
The public liability schedule refers to being insured for accidental injuries incurred by your tenants with in the confinement of your property e.g. if they suffer any injuries from a nasty fall down the stairs.
Since the UK is becoming ever more litigious, every landlord should have public liability insurance to cover themselves. Tenants are becoming much more savvy about getting “no win, no fee” solicitors involved. It is a sad state of affairs, but many want that easy buck. It’s always worth checking to see if your policy covers public liability.
DO I NEED LANDLORD INSURANCE?
Currently, there is no legal requirement for UK residential landlords in England or Wales to have any form of insurance policy. Most policies are available to provide ease and reassurance, nothing more. However, in all honesty, you’d have to be a complete and utter fool not to at least have a building insurance policy.
It makes no sense at all to go without a BTL building insurance policy. The maths is simple: pay approximately £150 a year for insurance, or stand to lose your entire investment by an accidental fire. Not to mention that you’ll still be liable to pay the mortgage. Imagine how demoralising that would be, paying off debt for a pile of burnt rubble.
Buy-to-let properties are large investments, probably your biggest investment, so you should be protecting your money from the unexpected (which often happens in this industry).
Assess your needs, base your decision on your circumstances, and get the policies you feel necessary. There’s a lot to be said about feeling at ease when you know you’re armed to the teeth with insurance policies.
QUICK AND EASY LANDLORD INSURANCE QUOTES
If you’re interested in getting landlord insurance, whether you want the whole lot, or specific types of insurance, then I would highly recommend talking to an insurance broker.
Not only will they provide you with specialist advice, but you’ll also get access to the best products on the market at the most competitive rates. There is no obligation and receiving the quotes is 100% free.
If you click on the link below, you will be directed to a landlord insurance form, where you can compare some of the best quotes around by talking to a specialised broker! I recently renewed my landlord Insurance policy by using the quote form and saved £260 and it only took 20 minutes to get everything up and running. So even if you have a policy, it’s well worth shopping around when your current one is due to expire because it’s such an incredibly competitive market.
Adler Insurance Group
Adler Insurance Group, Prudent House , 50 Yardley Road, Acocks Green , Birmingham , B27 6LG