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LANDLORD INSURANCE

Landlord Insurance Building & contents

It's critical for a landlord to get the proper landlord insurance.  Failure to get the correct landlord insurance could prove to be a very costly mistake, so it is imperative that a landlord fully understands what is, and isn't, covered under the landlord insurance policy in case disaster strikes..

Do I need specialist landlord insurance?

Yes! A standard homeowner property insurance will not cover a rental property. The nature of having a tenant would make any cover void. A tenanted property requires cover from a specialist landlord insurance policy. A household policy offers no cover for buildings, contents or landlord’s (property owner’s) third party liabilities; while the rental property is being let out.

What does landlord insurance actually cover?

Most landlord insurance policies contain two elements.  The bulk of the cost relates to the insuring of structure of the building, the rebuild cost.

Alongside this, a landlord insurance policy will typically cover fixtures and fittings, such as: carpets,  flooring, kitchens, bathrooms, white goods, light fittings and curtains. This landlord insurance cover is perfectly adequate for those landlords letting out an unfurnished property, thought it is worth checking that the policy has some provision for cover against accidental breakage of sanitary fittings and fixed glass such as windows, as these are one of the most common areas of damage in a rental property. 

One thing to be aware of with landlord insurance is that theft is only covered if there has been ‘forcible or violent entry or exit’. This therefore effectively excludes the situation where a tenant decides to make off with a landlord's appliances and kitchen for example and underlines just how important having an adequate rental deposit is. The chances are a landlord insurance policy will not cover theft by a tenant.

It is possible for landlords to add specific contents to their rental property's policy. Items of furniture, kitchen appliances, etc. However, once again the landlord insurance policy will only cover damage of these items and not theft by the tenant.

Calculating the buildings cover for landlord insurance.

The level of landlord insurance buildings cover will depend on a number of factors that relate to the rebuilding cost of your specific property.  It is possible to carry out a pretty accurate estimation for a landlord insurance quote of this using the Building Cost Information Service (BCIS) which is part of the RICS.  This calculator takes account of the area that the building to be insured is in, the type of property and its’ construction and will then generate a reinstatement value on which to base the level of landlord insurance you require.

Things to watch out for with landlord insurance:

There are a few things that the novice landlord should be aware of with landlord insurance:

  • Don’t be tempted to underinsure with your landlord insurance – if you do, it might save a few quid now but if disaster strikes it could leave you out of pocket by tens of thousands of pounds.  My opinion is, the risk reward ratio just doesn’t add up!
  • Check the level of your excess in the landlord insurance policy.  This is the amount of the claim that you are required to pay on any claim and effectively controls the viability of any small claims.  Increasing the level of excess on a landlord insurance will help make a landlord insurance policy cheaper, but too high an excess will effectively preclude a landlord from making a claim for small and often more numerous items.  An excess of around £100 is normally ideal on a landlord insurance poicy.
  • Be aware that most landlord insurance policies will exclude theft by the tenant.  This means that if a tenant disappears, stealing any items from a rental property, the landlord will not be covered by the landlord insurance policy.  You should ensure that this aspect of any potential loss should be adequately covered by any rental deposit that has been taken.
  • Most insurance companies will automatically index-link your landlord insurance policy to make sure that your reinstatement value is maintained in subsequent years.  It is worth checking this when you take the landlord insurance policy out.


Property Hawk recommends Alan Boswell's Landlord Insurance, we’ve found them to be competitive on price as well as very comprehensive on cover. We have an established partnership with them that provides Property Hawk users access to a special discounted rate on landord insurance.

So summing up, every landlord requires at the very least a specialist landlord building insurance for their rental property. 

Next to a mortgage, landlord insurance is typically the next largest expense and therefore it’s worth shopping around to get the best landlord insurance deals, but my advice is don't go cheap without understanding the different levels of cover between policies.  

As a simple guide Defacqto give a 5 star rating to landlord insurance policies - with five stars being the best.

 

Comments (2)

Joint landlord insurance
I own part of a house which has been converted into 2 flats. I own the ground floor flat and someone else owns upstairs. We both rent our flats out and we are unsure about the insurance. It's a very old house and on the deeds we both own the leasehold on both our properties plus we both own each others freehold too. I own hers and she owns mine, apparently it's very unusual. There is no management company because these belong to us. So how do we go about insuring the property???? I've already got buildings and landlord insurance but apparently you can't have 2 policies on the same building. She's cancelled hers because she was told there's no point.
Please advise because we are very confused.

Many Thanks
#1 - Tracey - 12/04/2015 - 18:36
Joint landlords insurance
I have exaxtly the same criss-cross lease

We insure the building with natwest for £200pa
I am looking at unfurnished landlords insurance for £63 to cove liabilities and fixturea and fittings by Homelet
#2 - Jos - 04/05/2016 - 00:24
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