Landlord Insurance Guide

landlord insuranceInsurance. It’s a necessary evil in almost all aspects of life. You need it to drive a car, to visit a doctor, and for your home. But what about when renting out your property? Is landlord insurance necessary and what exactly does it cover? 

We get it. The last thing you want is another expense. Letting agent fees are expensive enough and obtaining landlord insurance is just one more thing to add to your list.

But at the end of the day, obtaining landlord insurance now could save you not only money but time and aggravation in the future.

Keep reading to learn more about your landlord insurance options when renting out your property.

What is Landlord Insurance?

Like other insurances, landlord insurance protects you against damages and other financial losses when renting out your property. Accidents and unforeseen circumstances happen. Without landlord insurance, you’re forced to burden the entire financial responsibility of whatever damages or accidents occur.

Examples of these include weather damage, fire, or theft. Certain types of insurances cover both the property and its contents. Other policies cover things like loss of rent, but this is usually an add-on and not covered by a standard contract.

Other things you can add to your landlord insurance policy include:

  • Malicious damage by renters
  • Replacement of locks, keys, or broken glass
  • Accommodations
  • Fittings and fixtures
  • Subsidence
  • Trace and access

It’s up to you to decide how much landlord insurance you want or is necessary for renting out your property. Things to consider are the value of the property and its contents, as well as other overhead costs, your relationship with the renters, and geographic location (risk of natural disasters).

Landlord Insurance and Covid-19

It seems like everything has changed since the worldwide covid-19 pandemic struck and landlord insurance is no different. Any governments have passed bills preventing landlords from evicting tenants for 90 days.

Both landlords and renters are protected by a payment holiday to help ease financial burdens caused by the virus. If you have tenants who are currently behind on rent, you can file a claim until after eviction proceedings are complete.

Do I Really Need Landlord Insurance?

There’s no rule or law that states you must have landlord insurance – it’s simply common sense. Unless you have an endless supply of money, you’ll want coverage when the unexpected happens.

Whether it’s a natural weather disaster that you have no control over or your tenants turn out to be thieves or vandals, landlord insurance will help make you whole again.

It’s just one more way to protect yourself and your assets when renting out your property.

What Types of Coverage Are Available?

Once you’ve made the smart decision to get landlord insurance, it’s time to choose a policy. This will depend a lot on your budget and how much coverage you really think you need.

Remember, insurance options start with a basic policy and progress from there.

There are countless add-on options to choose from but the more you add, the more expensive it becomes.

Building Insurance

Most people start with building insurance because it makes the most sense. This type of landlord coverage helps pay for the cost of repairs in the event that the structure of your property is damaged.

This could mean natural damage from things like a flood or fire to vandalism or theft at the hands of your tenant.

Content Insurance

The next most important thing to protect aside from the structure of your property is its contents. This is a standard policy and it protects all the items you own inside the residence including furniture and appliances.

If you’re renting out your property without furnishings, you don’t need content insurance. Instead, the tenants might take out their own content insurance policy to protect whatever items they bring in.

Legal Expenses

There are countless legal expenses associated with renting out your property. While you never want to involve lawyers, sometimes, you need to. This type of landlord insurance covers the legal costs you incur when pursuing unpaid rent, evictions, or injury claims made by the tenants.

Accidental Damage

As we’ve said before, accidents happen and while you can’t predict them, you can protect yourself against the financial fallout. Accidental damage coverage helps foot the bill for common household accidents like accidental holes in the wall, broken windows, or red wine spilled on the white rug.

Landlord Home Emergency

Not only do accidents happen but they can happen at all hours of the night. Being available to fix your tenant’s problems 24/7 is one of the biggest landlord headaches when it comes to renting out your property.

But landlord home emergency coverage is a type of landlord insurance that safeguards your property using around-the-clock support and assistance. This covers things like a broken furnace or boiler, burst water pipe, or even a power outage. Now, both your tenants and your property are covered in case of an emergency.

Rent Guarantee

The only thing more troublesome than making repairs in the middle of the night is dealing with a non-paying tenant! Rent guarantee insurance ensures that you get paid on time, even if your tenants skip out on their obligation.

Once tenants are in arrears for two months or more, you can place a claim and collect up to eight months in back rent. Most policies cover up to £2500 a month.

Liability Insurance

When accidents happen, the damage isn’t always to the property or its contents. Sometimes, tenants are injured while living on your property. Unfortunately, you’re responsible for this, including associated medical bills and expenses.

Liability insurance (also known as public liability or landlord liability) protects you in the event that your tenant is seriously injured. If they decide to sue you or present you with exorbitant medical bills, this type of landlord insurance will help cover these costs.

Landlord Insurance Offers Peace of Mind and a Financial Safety Net

Insurance of any kind is a catch-22. Paying the monthly fee can be daunting but without it, you could be facing major bills and financial expenses when tragedy strikes or something goes wrong.

Although you don’t need landlord insurance when renting out your property, it’s definitely a smart investment. Not only does it cover your property and its contents but also your tenants in the event of an accident.

The monthly obligation of a landlord insurance policy is a small price to pay for peace of mind and financial protection.

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