Do I Need Landlord Insurance?
Find out if you need a landlord insurance policy and the answers to related questions you might have on the cover.
If you rent out a property, it’s a good idea to have landlord insurance. It covers lots of the same things that your regular home insurance does but it goes further, covering the risk that comes with a rental business too – whether you rent out one house or ten flats.
Also, usually the bank you have your mortgage with will insist you have landlord insurance. So making sure you have the right cover is important. Read more about understanding landlord insurance
Why do I need landlord insurance?
Do I need landlord buildings insurance?
Do I need landlord content insurance?
Do I need buy-to-let insurance?
Do I need landlord insurance for a flat?
Do I need landlord insurance if renting to family members?
There’s no legal obligation for you to have landlord insurance, but most buy-to-let mortgages come with the condition that you have it.
Being a landlord comes with it risks that you don’t have when you live in your own home. Imagine if a tenant of yours gets hurt – you could be facing a legal claim, and if you’re sued, home insurance may not cover you.
Also, if a tenant can’t stay in the property due an insured event, such as fire or flood, a landlord policy can cover the rehousing cost. It can even include cover for the loss of rent for the time when your tenants can’t live in the property. Landlord insurance reflects your responsibilities and covers your risks as a landlord. Read more about why landlords need public liability
There are a few exceptions to this, but if you’re the freeholder and rent out a property, you need to have landlord buildings insurance as part of your landlord policy.
A landlord building policy would insure the structure of the building, plus built-in items such as kitchens, bathrooms and boilers in most cases. As such, you need to make sure the property is insured for its full rebuilding cost, including professional fees and the cost of site clearance.
You may need expert advice to calculate the rebuilding cost, which is often a lot less than the market value. You can also get a rebuild cost estimate when getting a quote with Direct Line for Business.
Landlord insurance offers cover for the building or structure in the event of:
- Fire, lightning, explosion or earthquake
- Riot, civil disturbance or malicious acts
- Storm or flood
- Escape of water
- Accidental damage
Whether or not you need contents insurance as part of your landlord policy depends on whether or not you’re renting out a furnished property.
If you’re a residential landlord and include upholstered furnishings or free-standing white goods, such as fridges and washing machines, as part of the tenancy agreement, you may want to insure those items. If you had to replace all of those items after a flood or fire it may cost quite a lot. Landlord contents insurance will give you the peace of mind that you’ll be able to replace those costly items should you need to make a claim.
As a buy-to-let landlord, having proper building insurance is a way of helping you cover your investment.
Landlord insurance covers you against unpredictable events, like vandalism, fire or flood. It also insures you against claims should tenants injure themselves on your property and you’re found to be at fault.
As a property investor you need to ensure that you can ride out misfortunes that could derail your rental income or mean additional costs that would eat into your profits.
When you have a leasehold for a flat or part of a building, in some cases the freeholder will have the building insured. However, if you don’t have insurance that covers your flat or apartment, you may not be covered if your tenant is injured and you’re found to be at fault.
Say, for example they trip on a loose carpet, or a tradesman you hired is injured on the property. A legal claim could be taken out aginst you. Landlord insurance covers you against these types of claims. It’s worth making sure you have a policy that covers your flat and your property owners’ liability.
If you’re renting a property out to family members, you may feel that you don’t need a policy that will cover you against legal claims or loss of rental income.
However, if you’re not living in the property any more your home insurance policy may no longer be suitable. You may need landlord insurance in place so if your house is damaged you can put everything right. As 10% of our customers paid £118 or less for their landlord insurance (between January 2015 to June 2015) this may not be much different in price to your pre-existing home insurance so it’s worth checking.
Direct Line for Business Landlord Insurance
Direct Line for Business Landlord Insurance offers a range of insurance options for landlords. Whether it’s for a single property or a business with a portfolio of properties, our Landlord Insurance offers a high level of standard cover and the choice to extend your cover and increase limits.
Find out more about the details of our extensive award-winning landlord insurance.