Landlord insurance – your FAQs answered

What you need to know before protecting your buy-to-let property

You insure your life, your car, your home, your health, and even your earnings. Insurance is the way that you protect yourself from risks – the risk of leaving your loved ones with bills they cannot pay, the risk of being involved in a road traffic accident, the risk of fire and flood to your home, the risk of contracting an illness or disease that stops you from working, and so on.

As a landlord, shouldn’t you protect yourself from the risks of owning a property and letting it out?

Using standard home insurance to protect your buy-to-let property is not permitted. For example, damage caused by a tenant will not be covered. Though it is not a legal obligation to have landlord insurance, not having landlord insurance could cost you thousands.

Here are the questions that we are most often asked about landlord insurance, and the answers that will help you decide whether you need it and what cover you should take.

Are contents covered by landlord insurance?

It is possible to cover your contents with landlord insurance. Items such as furniture and white goods can be insured against risks including fire, flood and theft. However, your tenant’s belongings will not be covered.

Will the property be covered against fire, flood, and other damages?

Damage to the building can be covered, by including landlord building insurance and/or accidental damage insurance. Landlord building insurance will protect you against damage caused by fire, flood or vandalism. Loss or damage and repair or rebuilding will be paid for by the insurance company. You may also decide to cover your fixtures and fittings to protect them against the same risks.

In the case of water damage, flooding will normally be covered by landlord buildings and contents insurances. However, water damage that occurs over a long period – for example, because of an unrepaired leaking water tank – may not be covered. It is important to check whether individual clauses and conditions in your landlord insurance cover such events.

Can landlord insurance cover damage caused by tenants?

Accidents happen in the home, and it is likely that tenants will have accidents that may cause damage to your property. A slammed door may fall off its hinges. Spilt wine may stain a carpet. Moving furniture around may damage a wall. Accidental damage insurance can cover the costs of repair or replacement. However, if the damage is not accidental and has been caused on purpose by the tenant, then it probably will not be covered.

Will landlord insurance cover the tenant’s belongings?

No. Landlord contents insurance only covers the landlord’s belongings. When we welcome new tenants into your property, we discuss with them the need for insurance and can connect them with our insurance partner for tenant content insurance and tenant liability insurance.

Tenant liability insurance provides the tenant with cover to pay for accidental damage they may cause to your belongings – furniture, fixtures and fittings, white goods, etc.

What if my tenant is injured in the property?

If a tenant trips or falls over in your property, or suffers an electric shock or other accident, it is possible that they could claim compensation against you. If a compensation claim is found in the tenant’s favour, the compensation you might need to pay could run to thousands of pounds or more. Landlord liability insurance (a type of public liability insurance for landlords) will cover such occurrences.

Will landlord insurance cover malicious damage?

It is usual that malicious damage caused by vandalism or burglary will be covered by landlord building insurance. However, malicious damage caused by a tenant will not normally be covered. You may need to rely on the deposit the tenant lodges or consider specialist insurance to cover this.

Will landlord insurance cover loss of rent or rent arrears?

Loss of rent and rent arrears are two sides of the same coin. Whether it’s a disaster like a fire or a flood that causes your tenants to move out and stop paying rent or a tenant who falls on hard times and falls into rent arrears, landlord insurance can cover your losses.

However, you should make sure that such circumstances are covered in your insurance policy. It is likely that you will need to invest in specialist tenant default cover to protect you from rent arrears.

Some landlord insurance policies also cover a tenant’s hotel bills if they need to vacate your property temporarily – for example, if there is a gas leak and they are not permitted to remain in the property while your gas system is being repaired.

Will landlord insurance pay the costs of evicting a tenant from hell?

If you have attached legal expenses insurance to your landlord insurance policy, some of the costs of evicting a nightmare tenant could be covered. You should always check your landlord insurance policy details to see if this is included as standard.

Landlord insurance is essential to minimise the risk of being a buy-to-let landlord

You have chosen to be a buy-to-let landlord for very good reasons: property investment could change your life, providing you with a perfect stream of passive income as well as increasing your net worth through capital growth.

Good investors maximise their profits in a number of ways – one of which is by minimising the risks. Landlord insurance is one of five tactics to minimise your risks of being a buy-to-let landlord.

Contact us here at Ezytrac at

What you need to know before protecting your buy-to-let property

You insure your life, your car, your home, your health, and even your earnings. Insurance is the way that you protect yourself from risks – the risk of leaving your loved ones with bills they cannot pay, the risk of being involved in a road traffic accident, the risk of fire and flood to your home, the risk of contracting an illness or disease that stops you from working, and so on.

As a landlord, shouldn’t you protect yourself from the risks of owning a property and letting it out?

Using standard home insurance to protect your buy-to-let property is not permitted. For example, damage caused by a tenant will not be covered. Though it is not a legal obligation to have landlord insurance, not having landlord insurance could cost you thousands.

Here are the questions that we are most often asked about landlord insurance, and the answers that will help you decide whether you need it and what cover you should take.

Are contents covered by landlord insurance?

It is possible to cover your contents with landlord insurance. Items such as furniture and white goods can be insured against risks including fire, flood and theft. However, your tenant’s belongings will not be covered.

Will the property be covered against fire, flood, and other damages?

Damage to the building can be covered, by including landlord building insurance and/or accidental damage insurance. Landlord building insurance will protect you against damage caused by fire, flood or vandalism. Loss or damage and repair or rebuilding will be paid for by the insurance company. You may also decide to cover your fixtures and fittings to protect them against the same risks.

In the case of water damage, flooding will normally be covered by landlord buildings and contents insurances. However, water damage that occurs over a long period – for example, because of an unrepaired leaking water tank – may not be covered. It is important to check whether individual clauses and conditions in your landlord insurance cover such events.

Can landlord insurance cover damage caused by tenants?

Accidents happen in the home, and it is likely that tenants will have accidents that may cause damage to your property. A slammed door may fall off its hinges. Spilled wine may stain a carpet. Moving furniture around may damage a wall. Accidental damage insurance can cover the costs of repair or replacement. However, if the damage is not accidental and has been caused on purpose by the tenant, then it probably will not be covered.

Will landlord insurance cover the tenant’s belongings?

No. Landlord contents insurance only covers the landlord’s belongings. When we welcome new tenants into your property, we discuss with them the need for insurance and can connect them with our insurance partner for tenant content insurance and tenant liability insurance.

Tenant liability insurance provides the tenant with cover to pay for accidental damage they may cause to your belongings – furniture, fixtures and fittings, white goods, etc.

What if my tenant is injured in the property?

If a tenant trips or falls over in your property, or suffers an electric shock or other accident, it is possible that they could claim compensation against you. If a compensation claim is found in the tenant’s favour, the compensation you might need to pay could run to thousands of pounds or more. Landlord liability insurance (a type of public liability insurance for landlords) will cover such occurrences.

Will landlord insurance cover malicious damage?

It is usual that malicious damage caused by vandalism or burglary will be covered by landlord building insurance. However, malicious damage caused by a tenant will not normally be covered. You may need to rely on the deposit the tenant lodges or consider specialist insurance to cover this.

Will landlord insurance cover loss of rent or rent arrears?

Loss of rent and rent arrears are two sides of the same coin. Whether it’s a disaster like a fire or a flood that causes your tenants to move out and stop paying rent or a tenant who falls on hard times and falls into rent arrears, landlord insurance can cover your losses.

However, you should make sure that such circumstances are covered in your insurance policy. It is likely that you will need to invest in specialist tenant default cover to protect you from rent arrears.

Some landlord insurance policies also cover a tenant’s hotel bills if they need to vacate your property temporarily – for example, if there is a gas leak and they are not permitted to remain in the property while your gas system is being repaired.

Will landlord insurance pay the costs of evicting a tenant from hell?

If you have attached legal expenses insurance to your landlord insurance policy, some of the costs of evicting a nightmare tenant could be covered. You should always check your landlord insurance policy details to see if this is included as standard.

Landlord insurance is essential to minimise the risk of being a buy-to-let landlord

You have chosen to be a buy-to-let landlord for very good reasons: property investment could change your life, providing you with a perfect stream of passive income as well as increasing your net worth through capital growth.

Good investors maximise their profits in a number of ways – one of which is by minimising the risks. Landlord insurance is one of five tactics to minimise your risks of being a buy-to-let landlord.

Contact us here at Ezytrac at +44 0 1522 503 717 to discuss your landlord insurance needs, and benefit from our access to our partner Good lord and their incredible peace-of-mind landlord insurance policies.

Live with passion,

Brett Alegre-Wood

 

About the Author:

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Ezytrac. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids. Brett holds both the Level 3 Property Mark Qualifications for Property Sales and Property Lettings and Management.