Lucy Turner, Relationship Manager at Northwood Insurance Services, explains why standard building and contents insurance isn’t appropriate for rental properties.
Burst pipes, broken windows or busted locks. As a landlord, you’ll want to know your property and rental income is protected.
In most cases your tenants will respect your property, but it’s always good to have the safety net of having the right insurance coverage in place.
Once you become a landlord, standard building and contents insurance is no longer enough.
A standard home insurance policy usually doesn’t cover a rental property correctly due to the different risks associated with an owner occupier vs. a tenant living in the property.
Insuring your property and assets correctly is essential should the worst happen. A standard household insurance policy will likely be invalid if the property is being rented out to others and your insurers don’t know about it.
What is covered with landlord insurance?
The majority of policies will cover buildings so your property is insured against the significant risks like fire, flood, burst pipes or storm damage. As a landlord or property owner, you will need to ensure you have property owner’s liability to cover you in respect of personal injury or property damage suffered by third parties arising from your ownership of the property.
Other insurance covers to consider when choosing your policy can include:
- Loss of rental income or (alternative accommodation) following an insured event if the property becomes inhabitable
- Theft of landlord furnishings
- The availability of immediate claims support
- Accidental and malicious damage to your buildings and landlords furnishings caused by tenants subject to a policy excess
Things to consider
Although a cheap policy may seem like the best option when considering landlord insurance needs, make sure you take a thorough look at the key features and benefits as well as any significant exclusions or limitations to ensure it meets your needs. Make sure you are covered for the typical risks you may come across with your rental property; and consider whether the excess i.e. the amount you have to pay before if you make a claim is affordable.
Underinsuring your property could prove to be a costly mistake, it is important to ensure that your sum insured is adequate in the event of claim. For example if your property is valued at £100,000, and you ensure it for £50,000, you are 50% under insured, and so will only have 50% of any claims paid.
Northwood Insurance Services and Northwood are trading names of Jelf Insurance Brokers Ltd (Reg no 0837227), which is part of Jelf Group PLC, and is authorised and regulated by the Financial Conduct Authority (FCA). Registered address: Hillside House, Bowling Hill, Chipping Sodbury, BS37 6JX. (Registered in England and wales). Not all products and services are regulated by the FCA.