Landlords – should you opt for landlord insurance?
Mon 01 Feb 2021
Given the current state of the rental market, which is constantly challenged by the ongoing coronavirus pandemic, it’s even more important that landlords do all they can to protect their investments.
This includes having an insurance plan in place to make sure you’re covered if anything goes wrong.
But what are the main benefits of landlord insurance, and what type of cover should you be getting? We take a closer look below.
Is landlord insurance necessary?
There’s no legal obligation for you to have landlord insurance, but it’s a wise move if you’re renting out property. Luckily, it won’t break the bank to do so.
It differs wholly from home insurance, which protects the structure, fixtures and fittings and belongings in a home. While this sounds handy, it can prove less practical when letting your home as insurers assess the risk of tenants living in a property differently to a situation where you, as the homeowner, live there.
In comparison, landlord insurance is viewed as home insurance-plus, or a supercharged version of home insurance – there to cover the extra risks associated with renting out a property.
As you’d expect, a group of students, a young professional couple, or even a family with young children, are likely to be higher risk than a middle-aged professional couple who are owner occupiers. By renting a home out rather than living in it, the risks involved – and the chances of insurance claims being made – naturally rise.
What does landlord insurance cover?
As the landlord, you can tailor your level of cover to your individual needs. Naturally, the more elements of cover you add, the more the price will go up – something to anticipate in the face of Covid.
Effectively, landlord insurance covers everything you’d expect in any decent home insurance package but also focuses on a number of specific tenant issues.
You can choose to protect yourself from a range of possible scenarios, including eviction of squatters, loss of rent, and accidental/malicious damage or theft by your tenants.
Additionally, you can cover yourself against damage caused by the illegal growing of drugs in your rental homes, for legal expenses in situations where you need to take action in tenant disputes (although the eviction ban is still in place), and for public liability, protecting yourself if a tenant sustains an injury on your property and then makes a claim against you.
Lastly, you can opt for buildings cover – a form of buildings insurance that allows you to repair or rebuild your home if its structure is damaged via storms, flooding or excess rain – and contents cover for your own possessions. If something in your home is damaged in this way, or stolen by someone who isn’t your tenant, you would be protected by this type of cover. Keep in mind, though, that this cover doesn’t pay out for your tenants’ contents.
Who provides landlord insurance and what’s the cost?
There are a host of insurers that offer landlord insurance. Consider comparison websites such as CompareTheMarket, Confused.com, GoCompare and MoneySupermarket to weigh the best quotes for landlord insurance on the market.
The cost of landlord insurance varies depending on a number of factors, such as the size of your home and the type of cover you choose. The cheapest cover may not always offer the best value for money, as you need cover which is right for your own individual needs.
The average cost of landlord insurance is between £120 and £220 per year, but it’s a great way of protecting your investment and giving you peace of mind.
During these complicated times, working closely with an experienced, knowledgeable letting agent – one which understands the area you are letting in intimately – can help to ensure a tenancy goes off without a hitch, with issues resolved amicably and efficiently.
As an experienced letting agent working in Maidstone and surrounding areas, we can help you to get the most from your tenancies. To find out more, please contact us today.
We also provide an instant online valuation to give you an estimate of how much you could be charging in rent each month.