What Insurance do I need as a Landlord?
Surprisingly there are no legal obligations for a Landlord to hold specific insurance contracts however many councils, banks or management agencies will ask for proof of Property Owners Liability and Buildings Insurance if you have purchased using a mortgage.
There seems to be some confusion when it comes to Property Owners’ Liability. It is sometimes referred to using a variety of different terms including:
- public liability
- landlords’ liability
- landlords’ public liability
- or landlords’ indemnity cover
As experts in Landlord Insurance we would recommend that our clients have cover for the following where applicable:
- Property Owners Liability
- Rent Guarantee
- Legal expense cover for Eviction costs
- Landlord Contents Insurance
- Landlord Building Insurance
What does Property Owners Liability cover?
In simple terms Property Owners Liability covers you against the cost of claims arising from injury or damage suffered by a tenant or visitor as a result of a fault in your property. This could be a tile falling off the roof and injuring a passer by or a tenant slipping in the shower, if your tenant, one of your tenant’s visitors or any member of the public on your property suffers an injury or damage caused on or in connection with your property, then Property Owners’ Liability will protect you financially should the third-party claim compensation.
Property Owners Liability is typically automatically included if you take out Landlords Buildings Insurance but with more Landlords purchasing individual flats for rental we are seeing a rise in the uptake of Property Owners Liability on its own. This is an extra layer of protection for the Landlord in the event of any accident within their individual flat in a block.
I’ve taken a Deposit why would I need Rent Guarantee Insurance?
As a Landlord, you have taken steps to help protect your investment with an initial Deposit but this is typically only enough to cover 1 months rent and you may still need to pay legal fees if you have to evict or repossess the property. Rent Guarantee Insurance helps protect your investment by covering loss of rental income up to a set amount which is often enough to cover several months’ worth of rental income.
These policies normally come with Legal Expense cover included which can provide cover for Eviction Costs if your tenant still refuses to pay aswell as legal costs incurred following a contract dispute. It is worth noting that Insurers will impose strict referencing terms which need to be adhered to in order for the policy to pay out, before taking any action you should discuss this with your broker or insurance company.
Should I have Landlords Buildings and Contents Insurance?
An essential cover for most and we advise that ALL landlords should have Buildings Insurance if they are responsible for the entire property, this protects your investment from any damage which may include fire, natural disasters, subsidence or malicious damage. Most building policies will provide Alternative Accommodation cover if the property is deemed uninhabitable following an incident allowing you to move your tenants to a new premises whilst works are carried out at your property.
If you own the Leasehold you could still be responsible for insuring the building. This is typically included within a service charge but it is worth checking your agreement with the freeholder as to who is ultimately responsible for arranging and paying for the insurance.
While Landlord building insurance is considered essential, contents cover is considered an optional extra. Whether it’s suitable for you depends 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. Cover can be extended to include Accidental Damage aswell as Malicious Damage by the Tenant if required.
If the property is unfurnished, then it’s ultimately down to the tenant to get his/her own policy to insure their personal belongings. Note that Landlords are NOT obligated to insure the tenants possession.
I have taken out Insurance for my Properties – I don’t need to worry until renewal
Unfortunately, some Landlords are not aware that they are responsible for updating insurers in any change in circumstance at their property immediately. Failure to do so could lead to insurers invalidating your policy and leaving you personally liable for any financial costs. Thankfully using an insurance broker can make this a lot easier for you, you can advise them of any changes and they will notify insurers on your behalf and negotiate any terms where needed. Changes in circumstances include:
- Change in Tenants
- If the property undergoes any renovation works
- If the property is going to remain empty for more than 30 days
Renewal Due or want more information on Landlords Insurance?
Contact our expert Property team on 01732 252898 or email info@clarkewilliams.co.uk for a comprehensive review of your requirements and a bespoke solution designed to protect your investment. We aim to provide peace of mind at a reasonable cost – cheap isnt always best.
Alternatively you can always check out our instant quote facility by clicking here
