Professional Landlords Insurance
Professional landlords who own one or more properties need peace of mind that their valuable investments are protected, whatever might happen.
Landlord insurance is therefore vital, and usually a pre-requisite of a buy-to-let mortgage application.
There are several elements to this cover that landlords need. The first is Landlords Buildings Insurance. This will cover the cost of re-building your buy-to-let property in the event that it is destroyed by fire or flood damage. Buildings insurance will usually cover a wide range of other events which may cause damage to your property, such as collision by aircraft, vehicles or animals, falling trees or branches, and subsidence, landslip or heave.
The amount of buildings insurance you have is not based on the property's market value, but on its rebuild value, which is how much it would cost you to rebuild the property to the standard it was before any damage was caused. This is different to the market value because the cost of the purchase of land isn't included.
Second, there is Landlords Contents Insurance. Don't assume that this isn't necessary if you are letting the property out unfurnished, as you will still need cover for things like carpets, white goods and kitchen units. It is of course even more vital for those who are renting their property out part or fully furnished. The most comprehensive policies will provide cover for malicious damage by tenants as well as accidental damage, although some will charge an additional premium to include this in your policy.
Finally, the other main element of Landlords Insurance is Landlords Liability Cover. This offers financial protection in the event that a tenant or one of their visitors is hurt or injured at a property that you are legally liable for.
Other kinds of cover
There are several other types of insurance that professional landlords may want to consider. For example, if your property is going to be vacant for a prolonged period of time, perhaps because you haven't got tenants, or because you are doing repairs, you may want to take out specialist vacant property cover. This will provide protection in the event that the property is damaged while no-one is living in it.
Landlords may also want to think about taking out rent guarantee insurance. This will cover you for loss of rent and will also provide legal cover to help evict tenants who haven't been paying you to live in your property.
Some providers offer a range of other optional extras which can be added to your policy for an additional cost. For example, you can usually get home emergency cover, which will pay out if the property suffers central heating failure or burst pip damage, and may provide emergency alternative accommodation for your tenants if the property is uninhabitable.
Legal cover is also often offered as an optional extra, giving landlords access to legal experts who can help you pursue legal action for property damage and recovery of rent arrears.
Keeping costs down
One way to lower the cost of Landlords Insurance is by raising your excess, which is the portion of any insurance claim you must pay yourself. However, you must ensure it remains affordable, otherwise you might not be able to make a claim at all.
If you have several properties to insure then some insurers will offer a multiple property discount if you insure all your properties with them, so it's worth checking whether one is available before you buy. Some providers also offer special portfolio insurance if you own several buy-to-let properties, which means you don't have to worry about multiple renewal dates and administration.
You may also be entitled to a discount if you are a student landlord. Some providers will knock 10% of the cost of premiums if you are a student, so make sure you state that you are one when applying for cover.
Remember that premiums may be higher or lower depending on the type of tenants you are letting your property to. For example, if you are letting the property to several students, you will usually have to pay higher premiums than if you are letting to a professional couple, simply because students are considered to be a greater risk. Some insurers choose not to provide insurance at all to landlords who are letting property to students because of this.
Never just accept the landlord insurance renewal quote offered to you by your existing provider. Loyalty rarely pays, and you may be able to find much cheaper cover elsewhere.
You can compare quotes through MoneySuperMarket so that you can find the cheapest cover to suit your needs. Always read the small print carefully before buying, however, as very cheap policies don't always offer the most comprehensive cover.
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.
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