Benefits of Landlord Cover

If you leave your home and let it to tenants, or if you own buy to let property, standard home insurance packages may be invalidated – or their terms severely restricted – by the very occupation of the dwelling by tenants. When you are in this kind of property business, therefore, purpose designed insurance for landlords is likely to provide the range of benefits you may need:

  • just like a conventional owner-occupier, of course, the protection of the building against such potentially disastrous incidents such as fire, flooding, storm damage and so on, may be your first priority;
  • the building is likely to represent a considerable investment, so the level of cover is typically set at an amount equal to the cost of complete rebuilding, from the foundations up;
  • if you have a mortgage on your buy to let property, at least this element of insurance cover is typically a condition of the loan;
  • an additional benefit of landlord cover may be protection for those contents that you own (your tenants, of course, are responsible for arranging any insurance for their own possessions);
  • some policies might also offer cover for accidental damage (though an additional premium may be payable), whilst others also protect your property against the risk of malicious damage caused by your tenants;
  • the benefits of landlord insurance, however, typically extend to more than just the protection of physical property;
  • indemnity for your liability as a landlord – the duty of care that you owe to your tenants, for example – is commonly incorporated into such cover. Well it might, since claims from tenants and their relatives who have been injured, or even died, as the result of something you have done or failed to do as a landlord may prove extremely costly;
  • if you are letting property to tenants, the arrangement is effectively a business one – you expect to earn an income from the rents you charge. If the building becomes uninhabitable – as a result of one of the risks you have insured against – then your normal stream of income from rents may be lost. Some policies, therefore, provide for compensation (generally up to predetermined limits) for your loss of rental income in such circumstances;
  • although it may also be bought as a completely standalone insurance, unoccupied property cover may also be included in some buy to let insurance policies. This is designed to ensure that your property remains fully insured even when it is empty – those indeterminate intervals between tenancies, for example, or if it remains unoccupied during refurbishment or maintenance.

It may be seen, therefore, that the benefits of insurance specifically designed for let property make it significantly different from the more conventional home insurance relied upon by owner-occupiers.