Letting out your property to strangers will always entail some degree of risk, but investing in a landlord insurance policy can provide peace of mind and legal protection if needed.

A type of homeowner’s insurance, it is specifically designed for owners who rent all or part of their property to others.  Standard policies cover the building itself, with the option to insure any contents belonging to the landlord such as ovens, refrigerators, and other large appliances.  An insurance policy for landlords also covers liability for the property as well as medical expenses for non-residents who are injured whilst on the property. 

Landlords searching for insurance will find several different options to choose from.  If more general coverage is preferred, a comprehensive policy provides for all types of situations with the exception of those specifically excluded in writing.  Other policies will only cover certain types of damage, listing the eventualities that will be covered.  Many of eventualities that will not be are commonly known as “Acts of God”, such as lightning damage, earthquakes, storms and floods.  Other more standard threats that are likely to be included in your policy are theft and malicious damage, water leaks, or oil leaks.

Other coverage options for landlords to consider include cover for accidental damage, acts of terrorism, legal protection and representation, providing alternative accommodation, rent guarantee insurance, and liability insurance.

While not a legal requirement, landlord insurance is highly recommended to all landlords, protecting both the property owner and the tenants of the building.

Choosing a decoration style for your home can be a pitfall, but as with most things there are ideas you can follow that will help you choose how to complete the decoration of your property.  First impressions count, so the more stylish your property, the more likely you are to make a strong impression upon potential clients.  Firstly, don’t let personal taste affect the way you will decorate your property if you intend to rent it out to other people.  Even if your sense of style is great everyone is looking for different things, so if you want to rent your house to a family then decorate it accordingly. 

If your property is not safely completed to a suitable standard you may invalidate your landlord insurance.  Improper maintenance may also make injury liability from your tenants more likely.  Do some research – it is easy to take a tour of a new built property which has been professionally designed and completed.  It will have been decorated by experts and will be full of ideas to copy.  Make sure that the style you choose complies with the requirements of your landlord insurance policy.  A tenant may often have priorities and it is important to most tenants that their properties have a clean and practical bathroom and kitchen.  It is also important to remember that the use of bright colours and ample lighting will allow rooms to appear not only larger and brighter, but also clean.  It is also important to remember that less is more; keeping decoration simple will appeal to a wider range of people than gaudy, complicated designs.

Introduction

Since landlord insurance is a specialty product, some of the technical terms used in a typical landlord insurance policy may differ from those used in general insurance.  A clear understanding of these technical terms will enable a policyholder or an applicant to know how the policy will function, the conditions of payment and the extent of coverage a property will receive.  Some of the important terms used are:

•    Sum Insured – The sum insured is the total amount of money which the landlord’s building is insured for and is the sum which will be paid out in the event of the complete destruction of the building.

•    Contents Insurance – Contents Insurance is the insurance cover on the contents of the insured property which could include furniture, fittings and upholstery.  Contents insurance could be Full Contents Cover or a Limited Contents Cover, depending on the extent of coverage chosen by the policyholder.

•    Loss of Rent Cover – Loss of Rent Cover is a component of the policy which covers the landlord against any unexpected situations where the tenant ceases to pay rent.  This part of a policy will pay the landlord rent for a period of six to twelve months in the event of a tenant’s default on the rent.

•    Trace and Access Cover – Trace and Access Cover is an extension to a policy which is applicable in the case of oil or water damage.  This covers the cost of tracing the damage to its source.

When considering buying landlord insurance it is imperative to keep in mind a few things.  It is the desire of every landlord to have dependable tenants in their properties.  Whilst a diligent landlord will take effort to ensure that their tenants are reliable it may not always be the case that a landlord can be certain they have good tenants.  The risk may always be there that tenants are unable to pay their rent on time or even at all.  These situations are never convenient and unless landlords are insured there aren’t many easy options available – either to evict tenants or find a way of recouping that money. 

Rent guarantee insurance is a convenient way to ensure that if tenants stop paying rent or don’t pay rent on time, you as a landlord are covered.  With this form of landlord insurance you are protected against a tenant’s failure to pay rent, which in turn will provide you with a peace of mind to know that your rental income is secure.  Typical rental guarantee insurance may feature the following:

•    Up to £15,000 cover for rent arrears, this equates to approximately £2,500 monthly.
•    Up to £10,000 legal expenses cover associated either with eviction or claiming back rent monies owed.
•    Differing length of policy, usually either 6 months or 12 months, depending on the nature of the property and the tenancy agreement.
•    Complimentary legal advice.

When landlords compare house insurance quotes they are looking at a variety of additional factors compared to those of a typical house owner.  Their household insurance needs to take into consideration the associated risks involved in allowing strangers to live in their property.

Landlord’s buildings insurance will cover them from damage to the property as well as some extras, such as protecting them if the rent is not paid and the tenants leave without warning.  Some policies can provide 12 months of protection from loss of income if the tenant leaves or if the property has to be repaired due to damage caused by a tenant.  If the property becomes uninhabitable for any reason, your tenants can be provided with alternative accommodation while the necessary repairs are carried out. 

The landlord’s buildings insurance will not cover the tenant’s possessions as it is their responsibility to arrange their own home contents insurance, but some contents cover may need to be provided if the landlord has furnished the property with items such as carpets, curtains or kitchen equipment. 

Liability is another aspect of landlord’s insurance that will need to be taken into consideration.  Some tenants may make a personal injury claim against the landlord and the household insurance will need to cover this.

Cheap landlord insurance is fairly easy to find, particularly if you are a landlord of some years standing and have made few, if any, claims.  It is a good idea to use a price comparison website to find the best deal with the most comprehensive cover.