Landlords insurance is a policy to cover a property owner from financial losses connected with their property which they let out. A landlord insurance policy will cover the building itself with the option of including the contents left within. Some policies will give the option of malicious damage caused by the tenants – a valuable option for let properties. Many general insurance companies will not grant cover if you intend to place certain categories of tenants in your property i.e. Student, Multiple single sharers and tenants in receipt of State Benefits so please check.
It is essential that you advise and obtain consent to let your property from your mortgage lender, existing insurer and head lessee (for leasehold properties). Failure to obtain written consent from these parties may render your insurance void in the event of a claim.
Loss of Rent
Most policies will compensate you for loss of rent following damage arising from e.g fire, flood, malicious damage, burst pipes etc. if the property is uninhabitable as a result. This can range from 20 – 30% of the sum insured.
Landlords Rent Guarantee Insurance
These policies are invaluable for most landlords.This will guarantee you receive the rent you are expecting from your property regardless of your tenants personal circumstances, ability or willingness to pay the rent. Policies will usually guarantee your rental for a fixed period, typically 6 or 12 months. Some policies will provide additional cover once you have obtained vacant possession until you are able to re-let your policy.
Landlords Limited Contents cover insurance
Limited Contents Cover. Most UK properties are currently let unfurnished / part furnished. A limited contents policy would typically give a fixed limit of around £5,000 of cover items such as: *Carpets *Curtains *Sun Blinds *Light fixtures and fittings *Kitchen white goods on a new for old basis.
Redbrick, a division of The Paragon Group of Companies, found that only two thirds (67 per cent) of landlords have specialist buildings cover for their buy-to-let investments, while only 12 per cent have combined legal expenses and rent guarantee insurance.