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Do you really need a landlord insurance?

As a landlord, you will need insurance for properties you rent out to tenants. This usually includes similar protection to general house insurance, but as a landlord you need extra cover for things like:

  • Non-payment of rent;
  • Damage caused by tenants to your property;
  • Liability for injury caused by accidents;
  • Rehousing costs if your tenants have to move out following an insured event.

While there is no legal requirement for a landlord to be insured if you have a mortgage on your property it’s very likely that your lender will expect you to take out insurance before you let the property out. If there is a fire or major damage from a burst pipe, then the landlord is responsible and could be out of pocket to the tune of thousands of pounds. The right insurance will cover you for vandalism, as well as storm and flood damage. It may also cover public liability if someone is injured on your property.

Your tenant may have contents’ insurance, but this does not protect your investment as a landlord. It’s worth bearing in mind that if you rent out a room in a property you also live in – a lodger for instance – then it’s likely your normal home insurance will be invalid. Most home insurance policies state that only the policyholder and their immediate family should be living in the property.

If you’re renting out a flat, you will usually need landlord insurance rather than normal residential home insurance to cover your property, in the same way as renting a house. If there is a separate freeholder, they may organise the buildings insurance for the whole building. You will need to tell them you are renting your flat so that they can update the policy. You may still want to consider separate landlord insurance policy that includes property owner’s liability cover and landlord’s contents insurance to cover things like kitchen appliances and carpets.

A final point to remember is that your mortgage lender will require a tenancy agreement in place if you are renting your property, and that includes to family members. Landlords insurance will be a sensible precaution even if lending to your family as well.

I hope this helps you understand the benefits of landlords’ insurance. I am always happy to review your specific circumstances so get in touch if you need some advice.

 

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