First time landlord insurance

Choose from a range of insurers for first time landlords

Published on

MoneySuperMarket has teamed up with the leading UK landlord insurance companies to help you find a cheaper deal to protect your buy to let investments.

Row of red brick terraced houses

Compare Landlord Insurers

First Time Landlord Insurance

Many people these days are buying properties to let as a way to supplement their income. If you are a first-time landlord, there are lots of things to think about - locating a suitable property, arranging the finance, searching for tenants and so on.

First-time landlords should also think about protecting their property with appropriate insurance. After all, it is probably one of your most valuable assets.

Landlord's buildings insurance

It is the landlord's responsibility to arrange buildings insurance on any property they let out. The buildings insurance covers the structure of the property, so the walls and the roof, as well as any permanent fixtures, such as a fitted kitchen or bathroom suite.

If you have a mortgage on your property, the bank or building society will normally insist that the building is insured as a condition of the loan. However, even if you have no mortgage, it is important to protect your investment property, or you could lose a great deal.

Buildings insurance for landlords covers the usual range of risks such as storm, flood, fire, explosion and subsidence. Some policies also include malicious damage caused by a tenant - so if your tenant smashes a window or kicks down a door, you would be able to claim for the damage.

Property owner's liability

Landlords should also make sure that the policy covers the liability of the property owner for damage to another person or property. You are then insured if, for example, a gutter came away and fell onto your neighbour's car.

Most policies will insure first-time landlords for various types of tenant. So it shouldn't matter whether you let your property to professionals, students, or DSS tenants, though there are sometimes restrictions if the property is rented by asylum seekers. It should also make no difference whether the property is a house or flat, let privately or through an agent.

Of course, you should always disclose all the relevant facts about the property and the tenants to the insurer, or you could find that your policy is not valid and so will not pay out in the event of a claim.

Buying appropriate cover

It's important for first-time landlords to buy the right amount of buildings cover - too much and they could end up paying over the odds for their policy; too little and they could end up with an insurance shortfall. In other words, you could put in a claim for £100,000 but the policy would pay out a maximum of £75,000.

Many people make the mistake of insuring their property for its market value, resulting in them paying more than they need for their insurance. Instead it should be insured for the rebuild value which is the amount it would cost to build the property from scratch and this is usually lower than the market value.

Some buildings policies provide alternative accommodation for your tenants should the property become uninhabitable, perhaps after a fire. Or, you might be able to claim for rent reimbursement if your tenants have to move out following an incident such as fire or flood.

Insuring your contents

Many buildings insurers cover contents for first-time landlords up to a certain limit, which could be as low as £5000. You might not think you need contents cover, especially if the property is unfurnished, but think again. What about carpets, curtains or white goods? Could you afford to buy new carpets if they were ruined in a flood?

If you have a furnished property, you might want to take out a separate contents policy or talk to your insurer about raising the limit to reflect the higher value of your possessions.

Accidents can happen but accidental damage is not always automatically included with landlord home insurance. However, you can usually add it to your policy and the extra premium might be worth paying for the extra peace of mind.

Rent guarantee insurance

There are various other types of insurance available to first-time landlords, which you can usually add to your home insurance or buy as a standalone policy. Rent guarantee cover can prove particularly useful, especially when you consider that about one third of landlords have some difficulty with rent collection. The policy covers any losses you incur as a result of your tenants failing to pay their agreed rent. There are usually limits to the amount the policy will pay out, although some offer unlimited cover.

Rent guarantee insurance typically includes legal expenses insurance so that you are covered in the event of a dispute with your tenants, perhaps over rent or eviction. It can also include disputes with squatters. Legal expenses insurance typically covers your legal costs up to a certain limit - and can prove invaluable in these litigious times.

Unoccupied property

Even the most successful first-time landlords might experience some periods where their property is empty. But don't worry. You can take out insurance for vacant periods so that the buildings and its contents remain insured and your asset protected.

Lower premiums for first-time landlords

Landlords can cut the cost of their insurance in various ways but it's important to remember that the cheapest policy is not always the best. You have no doubt invested a great deal of time and money into your property, so you need to make sure that you have the right protection in place in case something goes wrong.

One of the easiest ways to save money is to compare prices - and MoneySuperMarket can help. Our online service is free and carries details of all the leading landlord insurers.

Some insurers offer discounts if you do not make a claim during the policy term. So it might be worth sorting out any minor incidents out of your own pocket to safeguard your no claims discount.

You might also be able to earn a discount if you buy more than one policy form the same insurer - or insure more than one property with the same firm.

Think too about increasing the excess, which is the amount the policyholder pays towards each claim. Just make sure you can afford to pay any higher excess, or you could end up in difficulty.

Guide to landlord insurance

Finding a cheap landlord insurance policy is one thing, however finding the right policy for your properties and your own individual needs can be a little more difficult. Take a look at our landlord insurance guide to make sure your policy covers all the bases.

Important Information

Please read the following information about our service and print copies for your own records

pdf    About our service

Did you find this helpful? Why not share this article?

Popular landlord insurance guides