You may find the following answers helpful if you are trying to get to grips with let property insurance.
What is landlords insurance?
There is a range of insurance products specifically designed in order to protect the interests of landlords – in other words, anyone who is obtaining rental income from a property they own.
These products are sometimes collectively called landlords cover or let property insurance etc.
Why do landlords need special cover?
Once you start to use property for generating income then any existing owner-occupier insurance home buildings and contents insurance cover on the property may typically become invalid.
If you wish to ensure that your asset is protected, you may need to look for landlords buildings insurance and/or landlords contents insurance.
How do these policies differ from ordinary buildings insurance?
In a sense, landlord policies are ordinary insurance!
They are simply designed to cater for the specific circumstances that may apply to a landlord but which may not in the case of an owner-occupier.
For example, you may find that some tenants may be rather less proactive in identifying a potential problem and getting it resolved, than would be the owner. That may increase the risks of cumulative damage in the case of let property, over and above owner-occupied property.
Are they more expensive than owner-occupier policies?
It may be extremely difficult to meaningfully try and compare one type of policy against another in cost terms, as they are covering a different risk profile – at least in some respects.
It may also be rather academic given that you typically cannot use an owner-occupier policy for a property that you are letting out (even if it is just a room or two within a property you otherwise occupy yourself).
Of course, one landlord policy may be more or less cost-attractive than another and that is why comparing policies of the same type is advisable when searching for suitable deals.
Would such insurance cover me for tenant-related risks?
No insurance policy may be likely to guarantee that it will cover all risks irrespective of the circumstances.
Some policies of this type may, however, offer elements of cover such as:
- up to £5m of third party liability cover;
- cover against malicious damage by tenants;
- some components of loss of rental income cover should you be in a legal dispute with your tenants (note that conditions may apply in these situations).
Once again, reading the policy carefully to see the full extent of your cover, prior to purchase, is typically a very sound idea.
Is landlords contents insurance mandatory?
Typically, no it is not.
In cases where you are letting your property unfurnished, you may wish to look for let property insurance that only provides landlords buildings cover.