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Property Hawk

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 (17)

landlord's insurance
I currently have 2 landlord's insurance for 2 properties buy to lets.

Could you obtain discount for me as I need a
third landlord insurance as my third property
is now due.

Thanks

Ria
telephone 01277 622598
#1 - Mrs R. Said - 03/27/2012 - 21:19
Tennant Falls
My tennant decided to go into the attic and fall through the ceiling. It seems quite clear from my internet search that there is no liability of the accident to myself, but who should pay for the repairs?
#2 - Hoops - 04/13/2012 - 22:03
insurance
Our agent told us that in order for our insurance to be valid that the tenants of the unit would have to obtain insurance for the contents of the unit as well, is this true. I am thinking not, but if it is so can you please explain why. Thank you
#3 - Rose - 08/10/2012 - 05:32
general contents and landlord insurance advice
I am a shareholder with one share in a block of six flats. I rent my flat to my mother. We shareholders employ a property management agent who looks after general maintenance and arranges building insurance and we split all fees - agent's bite, building insurance, etc.- by six. Recently a broken roof tile caused water ingress through kitchen cavity wall but before the real cause was sourced there were four quite large floods in the kitchen, destroying the floor, kickboard, paintwork and perhaps damaging 2 x electrical sockets and immersion heater switch. Obviously,my tenant is afraid to use any of these switches. What can I expect building insurance to cover and as there is landlord insurance of up to £5 thousand, what will this cover? I am finding agent tardy in letting me have policy wording. Your help will be appreciated.
#4 - Emma - 10/24/2012 - 16:25
general contents and landlord insurance advice
I am a shareholder with one share in a block of six flats. I rent my flat to my mother. We shareholders employ a property management agent who looks after general maintenance and arranges building insurance and we split all fees - agent's bite, building insurance, etc.- by six. Recently a broken roof tile caused water ingress through kitchen cavity wall but before the real cause was sourced there were four quite large floods in the kitchen, destroying the floor, kickboard, paintwork and perhaps damaging 2 x electrical sockets and immersion heater switch. Obviously,my tenant is afraid to use any of these switches. What can I expect building insurance to cover and as there is landlord insurance of up to £5 thousand, what will this cover? I am finding agent tardy in letting me have policy wording. Your help will be appreciated.
#5 - Emma - 10/24/2012 - 16:25
Insurance
We bought an ex local authority flat which we lived in for 3 years before deciding to buy a house and rent out our old flat to tenants. What kind of insurance do we need for flat now & is this compulsory? We still have building insurance for it
#6 - Amanda derby - 10/29/2012 - 18:23
Landlord Insurance
I won a property in a block of flats which I intend to let out. There is a block buildings insurance policy and as part of the service charge, the management company undertake repairs etc. The property would be let furnished. I assume I need insurance only for fixtures and fittings and furniture rather than to cover rebuild. Is this the case?
#7 - David - 01/11/2013 - 10:19
Landlords insurance
I have a friend with a ground floor flat in a 3 storey property.

He owns this but not the freehold!

The landlord says the roof needs doing, is this not covered by land lords insurance.

Also if he has a building company is he legally allowed to carry out the work himself?

What happens if work is carried out and fails?

Please help!!
#8 - Shell - 02/03/2013 - 17:56
Indemnity Insurance
Hi, can anyone tell me is it normal practise to take out Indemnity Insurance against the potential of a tenant suing the landlord (me) if an accident occurs in my property which they have rented?
#9 - Anne Hall - 02/14/2013 - 13:03
Accidental and Malicious Damage
Hi There,

I have a flat in a block of 16 which has a communal building insurance policy. This policy only covers the structure of the building and nothing inside the building, like whiteware, that some other policies cover. Although the flat is furnished there is very little in it worth much money. I want to protect the basic elements of my flat like carpets, windows, walls, whiteware against both malicious and accidental damage but I'm not sure if there is a policy out there that does this.

Landlord contents policies cover accidental damage but as I said there really isn't that much in the flat except the carpets that would require contents cover. Some landlord building insurance policies, for example http://www.justlandlords.co.uk also provide some cover for carpets, whiteware and windows but seeing as I already have some building insurance in the form of the communal policy I mentioned above I would then be paying twice for buildings insurance.

What would be your advice to me so that I can protect my flat as best I can?
#10 - Craig - 02/24/2013 - 20:35
Water damage
I own my property but it's a downstairs flat, we have several problems with water leaking through our ceiling causing water damage from the upstairs flat! The landlord will not pay for a plumber to come out and will not discuss insurance details how do i find out if he has landlord insurance? He just tells us to paint over the damage!!! i am at the end of my tether and need to seek some advice please help if you can.
#11 - Maxim Cousins - 03/03/2013 - 10:24
Advice on insurance
I have found a lovely flat to rent and when it came to signing the contract. It turns out that if I sign this contract I am also signing up to pay rentshield landlord insurance to cover damage to fixture, fittings and brake-ins.I thought that damage to fixtures and fittings is covered by your deposit.Is this a legal requirement? also i have my own contents insurance so brake-ins are covered too. should i ask to have this removed from the contract before signing it?

any advice on this would be great. thanks :)
#12 - Becky Britton - 03/09/2013 - 20:04
Attempted break in
I have landlords Insurance with Rentguard. On the 2nd April my tenants moved out, on the 3rd April we had an attempted break in via the back double glazed door. The Insurance assessors came to day to view the damage and stated that as it was not an actual break in we are not covered? I find this hard to believe, the culprits were disturbed as a neighbour heard the bang and rang the police and they were there very quickly!!! As the property is empty we are covered for 30 days now??

Many thanks

Mrs Disley
#13 - Mrs Disley - 04/09/2013 - 19:19
Landlord Insuraance - Buildings
I am the Owner/Landlord of one of the Ground Floor Flats in a small block of Flats in Scotland - there are 4 Ground Floor Flats and 4 First Floor Flats. We are about to renew our Public Liability Insurance for the Common Areas and in doing so it has come to light that there seems to be 'confusion' about whether or not a Full Buildings Insurance (including the roof) is required, because the Owner Landlords for the First Floor Flats say their Insurance covers this. Can you advise if this is correct but if not then must we legally have a Joint Common Buildings Policy for the whole building to protect ourselves and our Tenants?
#14 - Henry Mooney - 04/18/2013 - 13:27
Water through ceiling
I rent out a first floor flat. What happens If a water leak develops in the flat and goes through the shop ceiling below and damages the ceiling and some stock? Would I be liable? Would contents or buildings insurance cover me if so? I only have buildings insurance as part of the flats service charge.
#15 - David - 08/10/2013 - 09:01
2 buildings cover
Hi I pay my buildings insurance for my flat with the other three owners of flats to a maintenance company and recently have let my flat out. I took out landlords insurance covering both buildings and contents through my bank so now I am paying two buildings insurances, surely this can't be right. Can you help? This is my first time renting a property.
#16 - Claire grover - 10/25/2013 - 13:42
How and where can I get insurance on a tenanted leasehold flat
Please can you assist me:
I woiuld like to cover myself for a first floor flat in a leashold block of flats and my flat is above a shop.
Can I get an insurance that would cover me if there is leakage etc and there is damage to the shop, or any other perils??
#17 - Vina Solanki - 02/03/2015 - 18:08
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