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UK Landlord Insurance
There are a lot of risks associated with renting out property. Taking out a UK landlord insurance policy is essential to cover these risks. This type of insurance is different from normal home insurance cover and there are a variety of policies which protect against the different risks. You can take out a policy which covers both the buildings and contents of your property from theft and damage. Other types of policies cover accidental damage and you can insure against a tenant defaulting on the rent.
As well as protecting your property, a UK landlord insurance policy should include third party liability. A normal house insurance policy will not include all the risks that come with renting out a property. Landlords insurance is not a legal necessity but if your property is mortgaged, the lender will often make it a requirement.
Also See: Contents Insurance for Renters
What Is UK Landlord Insurance?
Although similar to house insurance, UK landlord insurance is a specific type of policy for anyone who rents out property. A policy can provide all three types of cover i.e. buildings, contents and property owner’s liability. You can also take out a policy that includes extras like rent guarantee cover and home emergency cover.
Unless there is a mortgage on the property, there is no mandatory requirement for a landlord to take out insurance. So, you will not be breaking any law if you do not take out this specialist insurance cover. However, it is worth paying the premium to get peace of mind should something untoward happen at your property. Do not rely on a standard home insurance policy as this would be void should the insurer find out you are renting out your property to tenants.
The price of premiums will usually be slightly higher than a standard policy as insurance companies view renters as a higher risk than an owner who is occupying their own property.
Landlord Insurance FAQ
Do I Need Landlord Insurance If I Live In The Property?
Yes, even if you live in the property you will need specialist insurance cover if you are renting out part of your home. A tenancy agreement should be in place and you must advise your insurer that you also live there. Additionally, it is important to advise and get permission from your mortgage lender that you are renting out part of your home.
What Cover Do I Need In Landlord Insurance?
In addition to the usual buildings and contents cover you can ask for public liability cover so that if a tenant or visitor is injured on your property you are covered against a claim. Cover for rent guarantee can be arranged and this will protect you from loss of income. Finally, home emergency cover is a good extra which offer protection against problems with plumbing, electrical problems and lost keys.
How Much Does Landlord Insurance Cost?
Premiums for landlord insurance will vary depending upon the location and the kind of property being insured. The insurance company will take into account the costs of rebuilding and the amount of cover for the contents plus any extra cover that is requested. Typically, prices range from as little as £150 to £300 per annum.
Why Do I Need UK Landlord Insurance?
If you own a property that is being rented out or if you have more than one rental property it is very important to take out UK landlord insurance. Even if you are renting out your home to relatives, a standard policy will not provide cover in the case of something bad happening. The insurer will want to see a tenancy agreement so that the policy is valid. In addition, you will need to get approval from your mortgage provider should there be any outstanding amount due on the property.
Although you may decide that adding extras like rental default or legal fees cover is not needed when you rent to relatives, you will still need buildings, contents and property owners liability cover. Make sure that the landlord insurance you take out is designed to cover homes and not commercial property as that is a separate type of insurance.
We recommend you shop around for a competitive insurance quote, but our own research shows the following companies provide the best rates and landlord cover:
- Direct Line For Business
- Simple Landlords Insurance
- Saga Landlord Insurance
- AXA Business Insurance
- Aviva Residential Property Owners
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What Cover Do I Get With UK Landlord Insurance?
A policy providing UK landlord insurance gives you comprehensive cover. You can get a policy tailored to your needs although most will include buildings cover, contents cover and public liability. Buildings insurance is to cover the cost of rebuilding your property if it is structurally damaged. Contents cover is to replace any items that are stolen but not by a tenant. Public liability protects you from claims by a tenant or visitor who has been injured whilst at your property and who makes a claim.
There are several add-ons that are a good idea to have. If a tenant does not pay their rent you can get cover for this. Or, if the property is damaged and the tenant has to move out this type of extra will cover that condition. Accidental damage covers the possibility of malicious damage or theft by the tenant and you can take out insurance against legal expenses to cover tenant disputes. Some companies also offer an extra that includes cover to pay legal expenses to evict.
How Are Premiums For Landlord Insurance Calculated?
When you apply for a landlord insurance policy the company will want to know what type of tenant you intend to install in your property. This can impact on the premium charged but it is vital to be honest as failing to declare the truth could result in a void policy. If you are intending to rent to students or the unemployed the premiums will be higher particularly if you are requesting non payment of rent cover.
Some insurance companies will refuse cover but there is plenty of choice so keep looking until you find the right policy. Most cover will allow the property to be empty for up to 30 days but if the property is going to be empty for longer you must advise the insurer. In this case you will probably be asked to take out unoccupied insurance cover.
Landlord Insurance For Flats
Landlord insurance for flats is basically the same as for houses. However, a leasehold property may have the buildings cover paid for by the freeholder so this may not need to be included in the policy. You must advise the freeholder that you are renting out the flat so that they in turn can advise their insurance company.
If you own a block of flats as a freeholder you will need comprehensive buildings cover as well as contents cover against damage by tenants. General maintenance for shared corridors, parking and pathways is not normally included in cover. Most landlords charge an annual fee to cover the costs of this type of maintenance but you can ask your insurer if it can be added to the policy.
How Much Does Landlord Insurance Cost?
The average cost for UK landlord insurance was £217 per year in 2018 but each case is different and the premium price will depend upon individual circumstances. Factors like location and the type of property will influence the cost of premiums.
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|If you are renting a property take a look at our tenancy agreement template. The best value pack for landlords in the UK. Includes a tenant advice sheet, landlord advice document, property inventory and full instructions.|