Rental Property Insurance

Rental property insurance the key facts

You may not like paying for rented property insurance – few of us do! Even so, it is in many cases a near necessity and a way of sharing our financial risks. This applies particularly to rental property insurance and the protection of landlords.

Now it is true that the word ‘landlord’ has certain connotations that unfortunately do not always invoke instinctive sympathy in the public mind. The reality though is different. The vast majority of landlords have huge responsibilities and worries, not the least of which is the extent to which they and their property are exposed to risk.

The risks are real and sometimes severe but first of all there is one key fact to grasp at the outset – ordinary buildings and contents insurance is useless and invalid for rented property.

As a landlord, your property risks are greater than those of the standard buildings and you need special rental property insurance to cope with them.

Your landlord insurance needs to cover you against things such as claims from your tenants or members of the public that they have suffered injury due to the condition of your property. Yes, you need the standard buildings insurance for damage to your property arising from natural causes, but you also need protection against the damage caused to it by the tenants whether accidentally or maliciously.

Then there are the risks associated with tenants who steal your fixtures and fittings or other contents. They can also walk away leaving hefty rent arrears. It’s worth keeping in mind also that when empty your property is far more likely to suffer a range of problems including burglary.

So, as a landlord your need for appropriate insurance is clear and if you accept that then you probably have a choice to make.

• You can do nothing and ‘wing it’ hoping your luck lasts. Fine, you may get away with it. It could be a viable route if you’re prepared to sit down and write some huge cheques following one of the above or other such problems.
• In some cases you may be able to ask your tenants to cover some of the above through their own insurance but you can’t abdicate your liability and it may be very brave to make your future financial health dependent upon insurance that you hope the tenants have taken out and maintained.
• In spite of the above warnings, you could try to take out a slightly cheaper ‘owner-occupier’ buildings and contents policy and hope that nobody would notice – particularly if you had to subsequently make a claim. If found out (and there is a very good chance you would be) this could result in your claim being refused, you could find it difficult or impossible to obtain future insurance and worse, making false declarations to support an insurance claim may be a prosecutable offence;
• You could consult a specialist provider of landlord insurance.

Assuming that number ‘4’ is your preferred route, there are providers of and experts in rental property insurance selling products on the Internet. They offer a wide range of reasonably prices policies. Having a look at them and seeing what they can do to reduce your risks will cost you nothing and you will end up better informed. It could be a good use of a few minutes of your time.