Landlord Insurance

Insuring a good income

Landlord insurance can be a great source of protection for a landlord or owner of property. Dealing with property will generally mean tying up a large amount of time and money into individual projects and can therefore leave landlords open to the prospect of very large losses should something go wrong.

What is covered by landlord insurance?

Landlord insurance is a form of insurance that is designed to cover a property owner in the event that they should suffer such a financial loss with relation to their properties. Landlord insurance, sometimes associated with property owners liability insurance, will generally cover the building itself, and the landlord will have the choice of whether or not they want to take out any contents insurance on top of this. This will obviously be the best policy if the landlord has a large amount of their own possessions in the property.

Landlord Insurance policies will generally feature a range of cover, from more conventional dangers such as fires, explosions, subsidence and water damage to the more unconventional dangers such as storms, earthquakes and floods. The policy will also provide the property owner with protection form more malicious threats such as theft and deliberate damage. Each Landlord Insurance policy will be different though so it is incredibly important that you look at a range of policies to make sure you have the cover that you need.  

The cost of landlord insurance

The actual structure of the property itself does make a difference to the setting of premiums by insurance companies. A newly built house is obviously likely to be less damaged than an older property. The new property will have newer pipes, electrical wiring and fittings and stronger walls and roofs. There is nuance here though, as the type of material out of which the property is constructed also makes a substantial difference. So for example, older buildings made out of bricks do not end to stand up very well to earthquakes but are quite resistant to fires. As fires are a more common hazard than earthquakes, an old brick building will cost less to insure then a building made out of wood even though ot might be more earthquake resistant.

Depending on the situation and the location that the property itself is in, there can be extra cover provided for such diverse things as terrorism, damage resulting from accidents, legal protection, rent guarantees, liability insurance and alternative accommodation costs. Insurance premiums tend to be fixed on to risk and most insurers will use postcodes and police records as well as their own claims history as a barometer of the rate they should charge for their premiums.

Landlord Insurance has come to be associated with property owners liability insurance, which provides cover for any damages or injuries that a member of the public sustains as the result of an accident in your property.

It is worth noting that the type, or quality, of tenant that you have entered into an agreement with will usually make a difference to the Landlord Insurance premium. So for example, some insurance companies will not provide cover for properties that have students renting but will provide cover for long term professional tenants.

The specific coverage offered by any particular policy will, of course, vary by insurance provider, so make sure that it suits your specific situation before taking it out.

Get advice on landlord insurance from a qualified independent financial advisor