New to Landlording? Confused about all the terminology and worried you're missing something? Read on...
What is landlord insurance?
Landlord insurance protects your rental property and your tenants, as well as the income you make from your rental activity. Just as you would buy home insurance for the property you live in, you need to insure a rental property in the same way, but a home insurance policy may not cover your property if you rent it out to tenants.
Whilst it's not a legal requirement, landlord insurance is designed to protect you and your property from damage and any loss of income as a result of that damage. Even if you have the most careful tenants renting your property, accidents still happen so it's worthwhile having a good policy in place to cover you when things go wrong.
What cover do I need?
Depending on the type of property that you have and the number of properties you let, your requirements will be individual to you but as a good start, all policies should cover the following: - Buildings insurance - Non payment of rent - Property owners' liability insurance- Loss of rental income
Each policy will differ in the cover that's provided and, to further complicate matters, there will always be optional extras that you can add to the policy. This is why it's important to compare the levels of cover provided across the board and make sure you're getting the right policy for your requirements.
Will my tenants need insurance?
Again, this isn't a legal requirement but your tenants should consider a home contents insurance policy to cover their items. The buildings insurance will be covered by you, the landlord, and will also cover any fixtures and fittings but this won't cover any damage to your tenants' belongings.
How do I cover my tenant's deposit?
All landlords must keep their tenant's deposit in a government backed Tenancy Deposit Scheme – or TDP as it's often referred to. This protects the deposit and ensures that tenants receive this back at the end of the rental agreement, provided they have paid their rent and left the property in a good condition.
This will cover your costs should you need to take legal action as part of your rental activity. Whether this is a dispute over non-payment of rent or a troublesome tenant, it's worth the peace of mind to make sure your policy has this feature and you are protected should you need to take legal action. Most policies will cover you for up to £50,000 of costs. You can compare the levels of legal cover once you have completed at quote at Protect Your Bricks.
Do I need landlord insurance if I am renting a property through AirBnB?
Landlord insurance won't cover you if you are an AirBnB host as most policies will require a six month tenancy agreement, so this wouldn't be covered. If you are an AirBnB host, you will need to consider insurance as your home insurance policy may not pay out on a claim if you have not declared this activity. Some home insurance companies are offering this as an optional extra and there are also specialist insurance providers who will cover this.
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Did you know?
If you have a mortgage on your property it's very likely that your lender will require you to take out insurance before you take on tenants.