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In-sure thing: All you need to know about insurance for landlords
A wide range of insurance options – some compulsory and others advisable – are available to landlords letting a property in the UK.
Allison Thompson, managing director at property specialist Leaders, has had her say on cover available and urged landlords to protect themselves.
“Unfortunately, there is always the possibility of something going wrong and a landlord being left out of pocket, even with the most committed and reliable tenant in place, so adequate insurance is a must,” she explains.
“By selecting the right products landlords can cover themselves against most eventualities, ensuring ultimate peace of mind.”
Allison has identified six popular types of insurance that every landlord should consider:
1) Buildings insurance
Buildings insurance is widely considered to be the most important type of cover and a priority for all landlords. Mortgage lenders are likely to insist on a landlord holding a policy – and even those without a mortgage are advised to cover themselves.
A good policy will cover the cost of rebuilding or repairing a property should it be affected by issues such as storms, floods, vandalism, fire, damage to water or heating systems, subsidence, falling trees and much more.
Your policy will also cover loss of rent, but only in the case of an insured peril, such as a fire or flood.
Buildings insurance will, in many cases, cover malicious damage by tenants, providing a further benefit to landlords.
2) Contents insurance
Contents insurance is just as important as buildings insurance, particularly if a property is let fully or part-furnished. This insurance protects all contents – such as furniture, sofas, televisions, carpets and other possessions – against theft or damage.
One tip is to ensure a policy offers a ‘new for old’ term, meaning landlords can replace existing items that are damaged or stolen with brand new versions. Landlords do not need to insure their tenant’s belongings, so should only purchase cover for their own items.
3) Landlord liability insurance
This crucial policy covers landlords in the event of somebody being injured or killed while on their property. It also protects landlords against any tenant who opts to sue following an accident. Those who let to students may find this type of cover is a requirement of their university, while local authorities often stipulate a minimum level when letting to applicants on housing benefit.
Landlord liability insurance is sometimes offered as part of another landlord policy, but if it is not it is well worth taking out.
4) Rent guarantee
Even tenants who tick every box during the application stage can go on to default on their rent. A change of circumstances – such as the loss of a job – is sometimes all it takes. But landlords with a rent guarantee plan in place – such as Leaders’ Premier Rent Guarantee Service – will still receive their monthly payments, typically up to a maximum amount for an agreed period.
5) Home emergency insurance
Landlords are unlikely to want to have to respond to every incident in a property, so instructing a quality letting agent to manage their tenanted home and investing in home emergency insurance is a wise move. Home emergency insurance covers the cost of arranging repairs in the event of, for example, a burst pipe, gas leak, burglary or pest infestation. It guarantees a qualified tradesman will be available to resolve emergencies 24 hours a day, 365 days a year.
For a wide range of specialist landlord insurance products visit Leaders’ specialist insurance partner Hepburns at hislinsurance.com.