Landlord building insurance – what does it cover?

Landlord building insurance is a type of coverage designed specifically for property owners who rent out their properties. It provides protection for the dwelling itself. It also offers liability coverage and compensation for lost rental income if the property becomes uninhabitable due to a covered event, such as a fire.

While landlord insurance and homeowners insurance share some similarities, a standard homeowners insurance policy won’t usually cover rental property related damage or liabilities. Types of landlord insurance are specifically designed to provide the coverage needed for rental properties, protecting landlords against risks that are unique to renting out homes.

Expanded coverage options in landlord building insurance can include protection for stolen property and vandalism.

Why is landlord building insurance important?

Landlords building insurance is not a legal requirement, but it’s highly recommended for landlords to protect their investment. If you have a mortgage or are financing the property, most lenders will require you to have landlord insurance as part of the agreement. This is because lenders have a financial stake in your property and want to ensure it’s protected.

Additionally, having insurance can make your property more appealing to potential tenants, as it demonstrates a commitment to maintaining a safe and secure rental space. It can also help you avoid prolonged vacancies caused by damage, as repairs can be made swiftly without major financial strain.

Even if a lender does not mandate landlord building insurance, purchasing it is still a wise decision to safeguard against potential losses, especially those that could arise from property damage or lawsuits. Reach out to us to get a quote.

What does it cover?

Landlord buildings insurance covers the following:

• Fire damage
• Storm damage
• Flood damage
• Loss of rent (in the event of an insured peril)
• Alternative accommodation (in the event of an insured peril)
• Property owner’s liability.

You can add on a number of optional extras to your landlord building insurance, including:

• Malicious damage and theft by tenants
• Trace and access cover
• Landlord legal protection
• Full accidental damage
• White goods.

It’s important to note that landlord insurance doesn’t cover the personal belongings of tenants. For example, if a tenant’s furniture is destroyed in a fire, your insurance won’t cover their loss; they would need renters insurance for that. Policies also exclude certain types of damage and risks, similar to homeowners insurance exclusions. These may include:

• Erosion and mudslides
• Acts of war
• Neglect
• Asbestos removal
• Changes in the water table.

What factors influence the cost of landlord building insurance?

Landlord building insurance can vary in cost. This means you’re likely to find coverage that suits your budget. The following factors can influence the cost of a quote:

• Insurance provider
• Location
• Claims history
• Tenant type & number of tenants.

Why should landlords take out landlord building insurance?

Landlords building insurance is a crucial safeguard for property owners who rent out their homes. Owning rental property comes with many risks, from accidental damage to natural disasters, and without proper coverage, landlords could face significant losses.

Protect the structure of your property

One of the most important reasons to have landlord building insurance is to protect the physical structure of your rental property. If your property is damaged by fire, storms, or other disasters, this insurance will cover the repair or rebuilding costs. Without it, you’ll be left paying out of pocket for expensive repairs that could affect your rental income.

Coverage for unforeseen events

Accidents happen, and unforeseen events like burst pipes, roof damage from storms, or even a fire can lead to costly repairs. Landlord building insurance helps cover these situations, giving you peace of mind that your investment is protected against major incidents.

Compliance with lender requirements

If you have a mortgage on your rental property, your lender will likely require landlord building insurance as a condition of the loan. This ensures the lender’s financial interest in the property is protected, and also prevents you from facing penalties or defaulting on the loan if the property is damaged.

Peace of mind for long-term investments

Rental properties are long term investments, and ensuring that they are properly protected should be a priority. Insurance provides a financial security net. It ensures that in the event of property damage, your investment is protected, and your rental income remains secure. This can also reduce stress, knowing that you’re covered in case of an unexpected event.

In summary, landlord building insurance is essential for any property owner renting out a home. It protects the structure, covers unforeseen events, and ensures compliance with lender requirements while offering peace of mind for the long term protection of your investment.

By understanding landlord insurance and the various coverage options available, landlords can make informed decisions to protect their rental properties and minimise financial risk.

Are you looking for landlord building insurance? Get a quote online today or request a callback. Alternatively, you can contact us via our website or give us a call on 01788 818 670.