Landlord House Insurance

Landlord house insurance

If you are a landlord, you may have to think carefully about the nature of your landlords buildings insurance. Landlord house insurance is by definition ‘different’ and misunderstanding that difference could be costly.

A home versus a landlords house

Once you rent out your property or a part of it, your property becomes a commercial concern. This applies even if you remain living in another part of it.

If you live in your house as an owner-occupier, you may find that your insurance needs are relatively straightforward and include:

• buildings insurance to protect you against natural disasters and major accidents;
• contents insurance to do likewise for your possessions.
• Once your property becomes commercial in all or part, you may discover additional risks that mean you have to think about specialist landlord house insurance. These additional risks may include:
• damage to your property caused by tenants (accidentally or wilfully);
• public liability due to injuries caused to your tenants or their guests as a result of your property (such as faulty wiring or a fall etc);
• loss of earnings potential due to the house being unavailable for letting following an accident;
• theft by tenants of fixtures, fittings or furnishings;
• vandalism or other thefts caused while the building is empty between lets or for refurbishment etc.

The insurance viewpoint

The above list hopefully indicates why insurance companies typically view a property that is rented-out as being of significantly higher risk than one that is exclusively owner-occupied.

As such, they understandably may wish to charge a higher insurance premium for the cover than they would for a normal owner-occupied domestic property.

This is important because some owners may believe that their existing domestic buildings and contents policy will continue to provide cover if they decide to start letting out their property. Some may believe that as the rentals are only conducted for short periods each year during the holidays, then their property isn’t really ‘commercial’ and does not need special insurance.

These assumptions about landlord house insurance may prove dangerously incorrect. Most policies of the ‘owner-occupier’ variety will be automatically invalidated once you start to take rent. This may not be something you’ll wish to discover for the first time when you need to make a claim!

Myths and legends

Some landlords may say that they’re covered by domestic home insurance and that’s all they need because the insurance company has no way of knowing.

That may prove to be seriously mistaken. The insurance companies have methods used to establish whether or not the owner is using a property for rental purposes and they may investigate this even more seriously in the context of a claim.

Not only could this result in your claim being refused but also possible prosecution in some circumstances for making false declarations in support of a claim.

Complexities and advice

The policy that is most suitable will of course vary depending upon your individual circumstances and the landlord house insurance that’s right for someone else may not be the best for you. It may be advisable to seek some specific help and guidance from a specialist provider of such insurance - that way you can have peace of mind that your investment property is fully protected by the most suitable buy to let insurance.