The first step to get landlord insurance is to decide what sort of cover is required. A basic package will include building insurance and public liability insurance. These protect against damage to the structure of a property, as well as the legal fees and damages related to a compensation claim from a tenant or other third party.
But what else does a landlord feel is at risk? Is the property heavily furnished with expensive items they own? If so, contents insurance is a wise add-on to look for. Does the landlord fear a tenant will not pay their rent? A rent guarantee insurance policy would be wise to purchase as an extra premium here.
Once the landlord has decided the type of cover they need, it is best to shop around for a quote that offers a happy balance of a good market price alongside the property value they wish to be covered. Many sites can help to compare landlord insurance, such as NimbleFins, by connecting landlords with a panel of both brokers and direct insurers.
Landlords can also go directly to insurance brokers or financial advisors to secure insurance. Brokers receive a commission if they sign a customer up to a product. It can mean they have access to special deals not available to customers contacting providers themselves. But some brokers or financial advisors can come with their own fees. If this is the case, it may only be relevant for a landlord who has multiple properties on their books or needs personal care – perhaps if they have many questions or a difficult-to-insure property.
A landlord would need to provide details of the property itself, its postcode, the type of tenants who live there, and the cost to rebuild the property if it was destroyed. Other information such as when the property was built, how many bedrooms, and whether a landlord has claimed in the last five years will also be requested. An explanation of the type of cover a landlord is looking for (e.g., solely building insurance or building and contents insurance) will also be required.
An insurance provider or comparison site will then come back to the landlord with a range of options, plus additional add-ons.
Some of the requirements a landlord insurance provider may request is the installation and upkeep of smoke and carbon monoxide alarms. If these are not in place, an insurance policy may be invalidated. If a rent guarantee clause is added, insurers will demand to see proof of the landlord’s due diligence, such as credit score checks, references from previous landlords, and information on their tenant’s employment.
Who provides landlord insurance?
Most household-name insurance providers offer landlord insurance, but there are also a number of property specialists who offer packages. It is important to note that landlord insurance is not the same as home insurance. A home insurance provider will refuse a claim if the property is let to tenants, and this was not allowed in the policy terms.
This is even the case if someone is renting a room in the home the landlord lives in. If there is an agreement the landlord cannot enter the person’s room without permission, this person is classed as a tenant rather than a lodger, in which case landlord insurance is needed rather than home insurance.
Property specialist insurance providers are often to the same or higher standard as the common big names, so it is worth shopping around and not being afraid to investigate companies’ ratings and customer reviews.
Who pays building insurance, landlord or tenant?
A landlord is responsible for securing building insurance, not the tenant. If the landlord is a leaseholder of the property, the freeholder should have the building insurance.
Building insurance covers the structure of the property as well as anything attached to it. This includes pipes and guttering, wires and cables, doors, windows, patios and yards, driveways, pavements, walls, fences and gates.
It also covers fixtures attached inside the house, such as baths, kitchen cabinets and worktops, tiles, and wooden flooring (although you may need separate insurance for these items). Carpets are excluded as they could be reasonably moved to another property, according to the Financial Ombudsman.
Building insurance is the key aspect of landlord insurance and covers the cost of rebuilding a home in the event of a fire, storm, flooding, explosion, earthquake, vandalism, theft, burst pipes, fallen trees and lampposts and more.
Costs do not just include labour, but also architect fees, site clearance and sometimes alternative accommodation.
A tenant is only responsible for insuring their contents in the property. A landlord is not liable for the theft, damage or destruction of a tenant’s contents unless the item was affected by something that went wrong at the property, such as a tree falling on a tenant’s car.
It is not a legal requirement for a landlord to hold building insurance or a tenant to have contents insurance.