What Is Landlord Protection Insurance?
If you rent a property to tenants, you may well have considered getting Landlord Protection Insurance. Landlord Protection Insurance is specifically designed to protect landlords from potential issues with tenants and problems that can occur particularly with rental properties.
There is currently no legal requirement for landlords to have specific Landlord Protection Insurance, although some buy-to-let mortgage companies do require it to be accepted for a mortgage with them.
Landlord Insurance Explained
Landlord Protection Insurance is usually taken out in the place of regular house insurance by landlords who are looking for extra protection from issues that are more specific to renting their property. Whether you have just one property or a whole portfolio of rental properties, Landlord Protection Insurance does exactly that, protects you.
What does Landlord Insurance Cover?
Landlord Insurance covers a range of potential problems that can occur both generally related to the property, but also more specifically related to renting the property. There are five aspects involved in Landlord Insurance being Buildings Insurance, Contents Insurance, Liability Insurance, Rent Guarantee Insurance and Emergency Cover. These are described in more detail as follows:-
Buildings insurance is a standard insurance type, covering the building and any damage that is done to it, including:
- Burst pipes
- Damage from adverse weather such as earthquakes or lightning
- Theft and vandalism
- Fire or smoke
Contents Insurance covers your contents in the property in the event of damage such as a flood or accidents. Landlord Contents insurance will normally cover the landlord’s possessions such as furniture, carpets, and electrical items, but not those that belong to the tenant. It is advised that the tenant also takes out their own insurance to cover their own belongings.
Liability Insurance gives you insurance against any injury that your tenant might incur whilst on your property. Having Liability Insurance does not, however, mean that you do not need to keep the property safe, but it can protect you if something happens to them and you are found to be legally responsible.
Rent Guarantee Insurance
Rent Guarantee Insurance is also known as Tenant Default Insurance or Rent Receivable Insurance and can protect your income if the tenant falls into arrears or sometimes if your property is sitting empty. The Rent Guarantee Insurance will often cover the amount of money that has not been paid as well as the legal costs of eviction and repossession should it be necessary. It can be useful to remember that sometimes this aspect of insurance is covered by property management companies if you are using one.
Emergency Cover Insurance
Emergency Cover Insurance is there to protect you from any emergencies that might happen to the property. These can include:
- Loss of services such as electricity and gas
- Loss of keys
- Heating and plumbing issues
- Window and door problems
- Roofing issues
It is important to remember that Emergency Cover Insurance does not always cover you for everything and you should read the small print before you take it out.
Do I need Landlord Insurance?
As a homeowner, you will need to have house insurance. However, as a landlord, you do not necessarily need specific Landlord Protection Insurance as a legal requirement. As mentioned before, however, it may be the case that if you have a buy-to-let mortgage, the mortgage company has a requirement for you to have it.
As a landlord, there are a number of other risks associated with your property in addition to the existing ones of a general homeowner, so having specific Landlord Protection Insurance is recommended.
What Landlord Insurance do I need?
When you are looking into the Landlord Insurance that you are wanting to take out, the most important thing is to check your mortgage requirements. It is essential that your insurance policy conforms with this. You can then take out extra Landlord Protection Insurance according to what you believe that you need and the risks that you think that you may have.
How am I protected from unwanted developments on my property?
For building developments to take place, it must go through the planning stage. It is unlikely that, as the landlord, this could happen without you giving your permission. It is important, however, that you add a clause into the rental contract that stipulates that a tenant may not make any alterations to the property without your consent. If they then go on to do this, they are in breach of contract.
In this case, you can:
- Get an injunction from the court that makes them desist from carrying out the alterations,
- Terminate the contract and evict the tenant, or
- Come to an agreement with them for them to carry out the work (and you pay for materials, for example)