When you plan on letting a property, you must have landlords insurance. What does this cover? That is the tricky party. Different insurers and policies will include varying cover options. Some coverage that’s optional with one insurer will be added into a standard policy with another insurer.
The following cover is available.
What does landlords insurance cover? A general term, you’ll receive buildings cover under your policy. This is the most important cover available because it protects your actual structure if damage occurs.
For example, if your property burns down, this would be covered within your policy.
In general, the following would be covered:
- Fire. In the event that fire breaks out, money will be dispersed. Fire can occur accidently or by an act of God. If lightning strikes the home and it catches fire or a tenant leaves a candle burning, you’ll be covered.
- Flooding. Broken water pipes or an unexpected flood. Burst pipes that cause damage will also be repaired.
- Acts of God. Some things are not within your control. Vehicles that drive into your home would be covered. Falling trees or lightning strikes would also be an act of god.
- Liability. If a renter trips and falls in or on the property, you would be covered in the event that a lawsuit was filed. Liability will protect you no matter who is injured on the property.
Subsidence is another inclusion.
Landlords insurance is a necessity by your mortgage company. You will need to maintain this insurance if you’re still paying for your property. If you own the property outright, you will still want landlord’s buildings insurance so that your property can be rebuilt if damage occurs.
More and more insurers are including contents cover within a standard policy. This is provided on a property by property basis, so if you have multiple properties, you’ll want to secure cover for each separate property.
Under contents insurance, your property’s furniture, fixtures, equipment and any other household items would be covered while the property is let.
A few of the many items that will be covered in a policy include:
- Flooring and carpet
- Electrical equipment and appliances
Accidental damage will also be available. For instance, if a tenant accidently breaks your television, this would be covered within a policy.
Contents insurance will require you to provide a full list of items that are to be covered. If new additions are added after a policy is made, you’ll be required to contact the insurer to add the new items to your list.
Claims will often require you to provide a receipt for the items damaged. Ensure that you save any receipts you have.
This is cover that not every landlord will need. If you’re an investor and own many properties, this is an option to keep insurance premiums low while still securing the cover you need. Typically, you’ll need to have 5 or more properties to be able to request portfolio insurance.
Blocks of flats can also be insured.
Essentially, this is one big policy that requires one premium and renewal date. As a landlord, keeping up with several policies can be a tedious task. Instead, portfolio insurance will:
- Keep premiums lower.
- Reduce the amount of paperwork.
- Provide one premium and renewal date.
The best part is that your policy will be tailored to your specific needs. You’ll want to discuss your options with your insurance provider. Always try to haggle for a lower premium price due to multiple properties needing to be insured.
Home Emergency Cover
What happens if your roof leaks, or your plumbing or heating systems breaks? Calling a professional to make a repair or replace the unit(s) can be very expensive. Home emergency cover will protect your property 24 hours a day, 7 days a week.
This cover is said to protect against essential service loss.
Among the many essentials include:
- Plumbing systems
- Heating systems
- Drains and sewage
- Power supply problems
This insurance will even come to the rescue if you lose your keys. Most policies will also have no excess to pay.
Home insurance cover is often very affordable and can help you save a lot of money in the event that one of these essentials breaks.
Rent Guarantee or Loss of Rent Cover
There are times when tenants will fail to pay rent. Sometimes, a tenant will leave the property, and as a landlord, you won’t have the rental money to be able to pay your mortgage. This can become a major issue.
Loss of rent cover will pay some or all of the rent that you’re supposed to receive from a tenant.
There is often a short duration of payments that will be received before cover ends. You will need to speak with an agent to understand just how much cover your policy will include.
Keep in mind that many of the cover options mentioned are often included within a standard landlord’s insurance policy. Even when included, you may be able to bump up your coverage limits for a relatively small increase in your premium.
Read over your policy to determine what exact cover you have and speak to an agent if there is something you don’t understand fully.
It’s highly recommended that you talk with your insurance agent to have your policy limits tailor-made to your needs. Bundling multiple covers under one policy may allow you to receive a discount.