Landlord insurance is typically centred on just a few basic and straight forward principles; policies may differ, though, not only in the total sums insured but also in the particular range of risks that might be covered.

The basics

Common to the typical landlord insurance is financial protection covering:

  • The building – naturally, this is likely to represent your biggest investment as a landlord. The structure of the property is exposed to risks such as fire, storm damage, flooding, smoke damage, falling debris and impacts. In the worst event, an incident involving one of these may result in the destruction of the entire building. Buildings insurance cover, therefore, needs to be sufficient for the possible rebuilding of your property;
  • The contents – the value of the property’s contents owned by you may also be significant. Whilst tenants assume the responsibility for arranging their own insurance for their possessions, you may wish to ensure that those in your ownership remain adequately covered.

Although these core elements are common to typical home building and contents insurance policies, it is worth reading the fine print carefully. A potentially serious risk – depending on the location of the property – might be subsidence, for example. Not all landlords buildings policies cover this risk, yet some incorporate it as part of their standard cover.

For landlords

Your business as a landlord relies on the collection of rent from your tenants. As the result of an accident involving one of the above insured risks, however, the property may become temporarily uninhabitable. In this event, some policies incorporate a form of letting insurance, offering an element of compensation (up to prescribed limits) for your loss of rent. This is sometimes called loss of rental income cover.

Depending on the type of lettings you manage, you may also wish to ensure that your insurer knows and accepts the likely background of your tenants. This might be especially relevant, for example, if your tenants are likely to be students, DSS claimants or migrant workers.

Your role as a landlord may also run the risk of malicious damage to your property (either the fabric of the building or its contents) by your tenants. Not all landlord insurance typically includes such provision, so you may wish to check whether this risk is incorporated as a standard feature of the policy.