Here you will find a brief discussion of the basic principles behind landlords insurance.

If you are an experienced landlord, you may know much of this already but if you are new to the business or are performing a feasibility study, you may find the points below to be helpful.

Why specialised landlords insurance is required

Landlords typically seek to protect their investment and important financial asset or assets.

Just like an owner-occupier, they may wish to ensure that, if disaster strikes their property, they have the financial support of an insurance policy to help.

Insurers typically regard a property used for income generation as constituting higher risk, in certain categories, than a property that is owner-occupied.

That is why they have produced landlords insurance to deal with the specific risk framework faced by rented properties.

Typically, you cannot use owner-occupier home buildings and contents insurance cover if you are renting out your property and it is also worth noting that some buy-to-let mortgages may require that you have appropriate insurance for landlords in place to protect the building and its structure.

Unoccupied properties

A buy to let property may occasionally sit for extended periods without occupants.

That may be due to delays in finding new tenants, repairs or renovations, building work or because you are taking a sabbatical for a few months.

Typical standard landlords policies may only provide cover for unoccupied properties up to a certain specified number of days (perhaps typically 30-45 days) after which the insurance will cease to be valid should the property remain unoccupied.

This is attributable to the fact that insurers may regard unoccupied properties as being at higher risk than those that are occupied.

Unoccupied property insurance is typically available to cope with this situation and you may find it interesting to note that this condition may also exist in standard owner-occupier buildings and contents insurance.

Casual landlords

Some people that are new to the area of renting out property, believe that if they are only renting out a part of the property or only renting their property out for a few weeks per annum (e.g. during the holiday season) that this means they do not need professional landlords cover.

It may be advisable to carefully read any existing owner-occupier insurance you have in place before reaching any such conclusion. Typically, starting to rent out even a part of your property means you are using it for the purposes of income generation and that may invalidate some or all of your existing owner-occupier policy.

You may, in such situations, still need landlords insurance.