LANDLORD INSURANCE

Landlord Insurance Building & contents

Like any business, one of the critical things for any landlord is getting proper landlord insurance.  Failure to get the correct landlord insurance on any level could prove to be a very costly mistake.  As a landlord you are effectively running a property business.  As such your main asset is obviously your buy-to-let property investment and it’s critical that you safeguard the value of this with the correct landlord insurance should disaster strike.

Do I need specialist landlord insurance?

Because of the nature of buy-to-let it is necessary to have specialist landlord insurance. This is because most household policies offer no cover for buildings, contents and landlord’s (property owner’s) third party liabilities; while the property is being let out.



What does my landlord insurance actually cover?

Most landlord insurance policies have two elements to them.  The bulk of any expense relates to insuring the structure of the building. Most landlord insurance policies also cover fixtures and fittings which include such items as: carpets, laminate flooring, kitchens, bathrooms, white goods, light fittings and curtains.   This landlord insurance cover is perfectly adequate for most landlords that let out an unfurnished property.  It is worth checking that the landlord insurance 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 and therefore potential claim on the landlord insurance.  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 effectively excludes the situation where your tenants decide to make off with your appliances and kitchen for example.  This is why having an adequate deposit is vital as this might ot be covered within the landlord insurance.

It is also possible for landlords to insure separately any contents in the property such as furniture.  Again the landlord insurance policy will only protect you against damage by the tenants not property theft.

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 or first time buy-to-letter should be aware of with landlord insurance:

• Don’t be tempted to underinsure with your landlord insurance – if you do you might save a few quid but if disaster strikes you could be out of pocket by tens of thousands.  That 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 your landlord insurance. It effectively controls the viability of small claims.  The larger the level of excess on the landlord insurance means generally the cheaper the landlord insurance policy.  However, landlords should avoid going for too high an excess on their landlord insurance policy as this will effectively preclude making a claim for many of the small more numerous items.  An excess of around £100 is normally ideal on landlord insurance.
• Be aware that most landlord insurance policies will exclude theft by the tenant.  This means that where the tenant has effectively stolen items or fixtures from your property and done a bunk these may not be covered by your landlord insurance policy.  You should ensure that this aspect of any potential loss should be adequately covered by your deposit.
• Most 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 Boswells Landlord Insurance, we’ve found them to be competitive on price as well as very comprehensive on cover and have partnered with them to obtain special discounted rates on landord insurance for Property Hawk users.

Every landlord requires at the very least landlord building insurance for their properties.  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.  

• FREE initial consultation
• Fixed price services
• Discounted rates for Property Hawk users