LANDLORD HOME INSURANCE

If you are letting a property – any property – to tenants, the appropriate type of protection is landlord’s insurance, in place of the standard home building and contents insurance that may already be in place.

Landlord home insurance is required because the way in which the property is occupied and the purpose for which it is used – namely as a buy to let business – pose significantly different risks.

Thee fact that you are letting such a home, therefore, becomes a material fact which any insurer is entitled to know and in the absence of such information is able to decline any claim for loss or damage to the property.

What’s covered?

On the assumption that you have informed your insurer and arranged your insurance – what is likely to be covered?

The building or buildings

• this element of cover typically lies at the very heart of your landlord insurance, offering protection against such major, potentially devastating risks as fire, flooding, escape of water, impacts, storm damage or vandalism;
• when determining the level of covered required, it is important to anticipate the worst case scenario in which the building may need to be completely reconstructed following a major incident;
• you might also want to bear in mind that not all building insurance policies cover against subsidence, so if this is likely to be a concern with your buy to let property, you need to make sure your policy includes it;

The contents

• as the guide Renting a Property published by the Royal Institute of Chartered Surveyors (RICS) reminds us, tenants are responsible for arranging insurance for whatever contents of the let property they occupy;
• your own property that may still be in the premises – especially if it is a furnished let – is nevertheless likely to be covered by your landlord home contents insurance;

Landlord’s liability insurance

• a very important element of cover – given the potentially very expensive claims that might be involved – is indemnity for your landlord or property owner’s liability in the event that a tenant, a visitor or even a member of the public suffers an injury or has their property damaged as a result of any negligence on your part as the owner;

Cover for loss of rental income

• a further recognition of the fact that you are running your buy to let property as a business is reflected in the way landlord insurance typically responds to some reasons for your missing out on the opportunity to collect rents as normal;
• following a significant insured incident, for instance, the property may become temporarily uninhabitable pending its repair or rebuilding;
• in such an event, insurance for landlords may offer compensation up to a fixed sum or up to a given percentage of the total building sum insured.

When your home is let to tenants, therefore, landlord insurance is designed to safeguard your investment in both the physical property of your business and in other intangible risks and perils it may face.