In this three-minute read, we explain what landlord insurance is and how to protect your property investment.
If the mere mention of the word “insurance” makes you want to nod off, here’s a quick hack to focus your mind.
Ask yourself this question: what’s the worst that could happen to your property investment?
Is it a flood, a fire, squatters, or a tenant tripping on a wobbly floorboard and suing you for every last penny? We bet you feel wide awake now.
Hopefully, none of these scenarios ever become a reality for you. But sometimes in life, the worst does happen – hence the need for insurance.
Landlords are not legally required to have insurance, but it’s a condition of most buy-to-let mortgages. Standard home and contents policies don’t cover tenancies, so specific landlord insurance is needed.
You can get policies which cover all sorts of eventualities, but the broader the cover, the bigger the premium. Here’s a rundown of the most common types of insurance.
Landlord Liability Insurance
This covers you if a tenant says your property caused them an injury. For example, if they trip on faulty wiring or fall down the stairs due to a broken bannister.
Protects the actual building in the event of fire, flooding or vandalism.
Covers contents such as furniture, appliances and carpets in the event of theft, fire or flooding. It only covers your items; tenants need to insure their own belongings.
Covers things likes holes in the walls and spills on the carpet and is usually added to contents insurance.
Loss of Rent
If your property is uninhabitable due to fire or flood, a proportion of the rent is covered.
Legal Expenses Insurance
Covers you if you wind up in a nasty legal dispute over an eviction or unpaid rent.
Covers you for a certain amount per calendar month, if a tenant doesn’t pay their rent.
Most landlord insurance covers property liability, buildings insurance, contents and loss of rent. You can then add in (at a price) extra coverage, depending on your circumstances.
Always do your research and read the fine print before you commit to a policy. Also, get advice from us, to ensure you don’t leave yourself exposed.
A Word of Warning
Understandably, landlords worry about tenants damaging their property, but often the most significant risk arises when a property is empty.
Vacant properties are a target for vandals, squatters, arsonists and thieves. This is why many insurance policies become invalid if the property is empty for more than two months.
The best protection is to manage your property well, and this is where we, as good lettings agents, come into our own.
An insurance policy is your last resort in the event of a disaster.
An experienced, responsible letting agency like us is a proactive force, that can ward off disaster in the first place.
- help you find a reliable tenant, so there’s less risk of damage.
- keep on top of maintenance issues to prevent accidents.
- head off problems with rent arrears before a case reaches court.
- market your property professionally, so it’s not vacant for long.
It’s impossible to predict the future, but having a good letting agent working for you is a wise way to protect your property.
Here at Athelstans, we’re here to help manage and protect landlords’ property investments. If you have any questions whatsoever feel free to get in touch with us.