What is Landlord Insurance & Why You Need It



The Insider @ Houst
Last updated on
July 31, 2023
July 27, 2023

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What is Landlord Insurance & Why You Need It

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Being a landlord entails securing a specialised insurance policy for the properties you lease to tenants. This insurance encompasses similar safeguards as your regular home insurance, providing coverage for both the physical structure and the contents within, safeguarding against unforeseen circumstances.

Nevertheless, as a landlord, there are additional aspects that necessitate specific coverage, including:

  • Rent non-payment protection: Safeguarding your income if tenants fail to fulfil their rental obligations.
  • Tenant-inflicted property damage: Protection against any harm caused by tenants to your property.
  • Loss of income and rehousing expenses: Coverage for lost earnings and costs associated with relocating tenants due to insured incidents.
  • Liability for tenant accidents: Providing financial protection in case of injuries sustained by individuals within your property.

In this blog, we’ll discuss “What is landlord insurance?” and everything you need to know about it! So, let’s get started!

Table of Contents

What is Landlord Insurance?

Why Landlord Insurance Matters - Protecting Your Rental Investment

Landlord insurance serves as a crucial safeguard for property owners engaged in the rental business. When you lease your property to tenants, they become the individuals or groups entering a rental agreement. This agreement outlines your duties as a landlord and frequently includes provisions that mandate appropriate insurance coverage.

Landlord insurance aims to shield property owners from potential financial setbacks related to rental properties. It offers protection against theft, fire, and damage caused by severe weather conditions. Expanded landlord insurance can cover additional coverage options such as unpaid rent and intentional destruction of property by tenants.

Do You Need Landlord Insurance Instead of Home Insurance? 

While there is no legal obligation to have insurance when renting out a property, opting for landlord insurance instead of regular house insurance is highly advisable. If you have a buy-to-let mortgage on your property, your lender may even require you to have insurance as a condition.

Standard home and contents insurance may not address the unique risks landlords face. Landlord insurance takes account of loss of rental income and accommodation costs in case tenants need to vacate the property due to a covered event. Also, it provides liability coverage tailored to the responsibilities of a landlord.

Types of Landlord Insurance 

Landlord insurance provides different coverage options to meet the needs of property owners. While the type of insurance you require depends on your individual circumstances, here are some common types of landlord insurance:

Buildings Insurance

  • Protects the structure of the rental property against damage caused by various events such as fire, weather conditions, theft, or vandalism.
  • Covers the cost of rebuilding the property if it is damaged beyond repair.
  • Typically covers damage from natural disasters, subsidence, fire, smoke, flooding, and malicious damage.

Landlord Contents Insurance

  • If you rent out your property furnished, this insurance protects your own belongings within the rental property.
  • Covers damage from fire, flooding, or theft to items you provide.
  • May cover malicious or intentional damage caused by tenants, but check your policy for specific details.
Landlord Insurance - Comprehensive Coverage for Rental Properties

Fixtures and Fittings Insurance

  • Usually covered under the main buildings insurance policy.
  • Includes items such as bathroom suites, carpets, flooring, internal doors, and integrated appliances.
  • Protects against theft and property damage.

Accidental Damage Insurance

  • Covers the cost of repairing or replacing items damaged by accidental incidents in the rental property.
  • Includes things like stains on carpets, holes in walls, or broken windows.
  • Does not cover wear and tear or intentional damage caused by tenants.

Liability Insurance

  • Protects landlords against legal claims if a tenant or visitor is injured or their property is damaged while on the rental property.
  • Covers costs associated with injuries from accidents, damage caused by falling objects, or other liability issues.

Legal Expenses Insurance

  • Covers legal costs in case of a dispute with tenants, such as eviction proceedings or contract disputes.
  • Some policies may include this coverage automatically, but always verify the specifics of your policy.

Rent Guarantee Insurance

  • Provides protection against loss of rental income if tenants fail to pay rent or if the property becomes uninhabitable due to damage.
  • May include coverage for accommodation costs for tenants if they cannot live in the property due to safety concerns.

Emergency Cover

  • Offers assistance and coverage for emergencies, such as burst pipes, roof damage, blocked drains, pest infestation, or lost keys.
  • Coverage varies between insurers, so review the details of what is included.

Why Do You Need Landlord Insurance? 

While landlord insurance is not legally mandated, it is highly recommended for several reasons. Here's why you should consider having landlord insurance:

Property Protection

Landlord insurance covers your property against unpredictable events such as fire, theft, vandalism, or natural disasters. It helps cover repairs or rebuilding costs if your property is damaged or destroyed.

Liability Coverage 

Landlord insurance includes liability protection, which is crucial in case someone gets injured on your rental property. It covers legal expenses and potential damages if a tenant or visitor sues you for injuries or property damage.

Loss of Rental Income 

Landlord insurance can protect you from financial loss if your tenants fail to pay rent or if your property becomes uninhabitable due to covered events. It can cover the lost rental income during such periods.

Additional Coverage Options

Landlord insurance often offers additional coverage options, such as legal expenses insurance, rent guarantee insurance, and emergency coverage. These can help you deal with legal disputes, recover lost rent, or handle emergencies effectively.

Mortgage Requirements 

If you have a buy-to-let mortgage, your lender may need you to get landlord insurance. This safeguards their investment in case of property damage or liability claims.

Get Landlord Insurance Now - Safeguarding Your Rental Business

How Much is Landlord Insurance? 

Determining the cost of landlord insurance entails several factors that contribute to a personalised quote. These factors revolve around your rental property's unique aspects and specific coverage needs.

The type and value of the property you rent significantly influence the insurance cost. Property size, location, age, construction, and occupancy play a role in assessing the potential risks and coverage requirements.

Also, the level of coverage you desire impacts the premium. Whether you opt for essential protection or choose additional coverage options like rent guarantee or legal expenses, each choice affects the overall cost.

Insurers carefully evaluate your circumstances to gauge the likelihood of claims and the potential financial implications. This personalised assessment means that the cost of landlord insurance policies can vary widely as it considers your unique situation.

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Beyond rental services, Houst offers comprehensive property management. Our dedicated team handles inspections, maintenance coordination, and tenant concerns, giving you peace of mind. Experience the convenience of Houst and unlock the full potential of your property. Contact us today to hire the best property manager for Airbnb!

The Insider @ Houst

The Insider @ Houst

The Insider team provides up-to-date and relevant information on short-term rentals to help navigate the world of short lets. If you're interested in publishing your content, please get in touch with us at expert@houst.com.

The Insider @ Houst

The Insider @ Houst

The Insider team provides up-to-date and relevant information on short-term rentals to help navigate the world of short lets. If you're interested in publishing your content, please get in touch with us at expert@houst.com.