If you’re a landlord, you need to make sure you have a contingency if things go wrong. The likelihood is that at some point you’ll need to carry out repairs and if your tenants don’t pay their tent on time, you could find yourself in dire straits.
That’s why it’s essential to have the right insurance in place to cover you for every eventuality. But what sort of insurance do you need?
Landlord insurance will include many useful features including buildings insurance, accidental damage cover and financial protection. It isn’t compulsory (although buildings insurance will be a requirement from your mortgage lender) but some lenders do make certain other insurances compulsory before approving your buy-to-let mortgage.
We outline the different types of cover below. It may look expensive but don’t panic – different types of cover can be combined into one policy from a single provider. It’s important to do your research and talk to us at The Mortgage Hub – and remember, a policy may seem cheap, but it could end up costing you more in the long run.
The bottom line is that renting your home to people you don’t know is risky, so it’s important to be properly covered should something go wrong.
This is one of the main types of cover that you will need as a landlord. This is an essential policy to have in place because it protects your investment from flood, fire and damage from adverse weather – covering the rebuilding costs. Without this you could face losing your property should the worst happen. You’ll need to know the rebuild cost of your property before you take out a policy.
This policy will usually include replacing kitchens units and bathroom suites and some policies will also cover sheds, garages and other outbuildings. It’s important to talk to us at The Mortgage Hub as we have access to insurance policies that will suit your individual requirements rather than a ‘one size fits all’ policy.
This is another vital insurance policy that we would recommend – especially if your property is rented out on a furnished basis. This will protect any electrical items, soft furnishings and furniture including carpets, sofas, TVs and beds from damage or theft. It’s also worth including accidental cover if you have items that are in good condition because tenants are often less worried about items belonging to someone else.
It’s advisable to take out insurance with a ‘new for old’ policy. The policy will only cover items belonging to you, if your tenants want their own items insured, they will need to take out their own insurance policy.
Landlords’ liability insurance
Most policies will allow you to add liability insurance to your policy at an additional cost. This is usually a requirement if you are renting your property to students or social housing tenants. This covers you against a tenant who might sue you for an accident, injury or even death that takes place in your property. For peace of mind it’s better to have this cover in place.
Void rental periods & unpaid rent
If your property is inhabitable for any reason and you are unable to rent it out, you could lose your property especially if your mortgage payments are reliant on rental income. We can talk you through the policy wording and exception to make sure you know exactly what you are and aren’t covered for.
Legal expenses insurance
If you have any legal costs following a dispute with tenants for example in trying to obtain unpaid rent, it’s a good idea to have legal expenses insurance. This will help with any costs associated with evicting tenants and repossessing your property from squatters. It will also cover the cost of defending you against criminal action.
Landlords’ home emergency cover
This type of cover will protect you against any emergency repairs that need to be carried out such as a leak, burst pipe, break in or infestation that needs to be dealt with. Qualified tradesmen will come to your home to deal with any emergencies 24/7 which can be costly if you are uninsured.
This type of cover will include call out, labour, materials and any follow up repairs. It usually covers you for around £500 per claim but there are different policies that we can look at to suit your requirements.
Talk to us at The Mortgage Hub about the right insurance policy for you.