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Basics of landlord insurance

Landlord's insurance

Going to be a landlord? Here are the 5 essentials to remember to make the most out of your property investment!

1. Cover the right amount! The rebuild value NOT…the market value!

What you pay for your property is not the amount that you will insure it for.

The reason for this is you are effectively insuring the property to be rebuilt (sometimes this will also include the contents) and not the value of the property, should be it bought again on the open market.

A house with a market value of £220,000 could cost £150,000 to rebuild. If you insure your property for the full £220,000 you are adding significant costs onto your premium.

One of the biggest mistakes we see many of our customers make is over-insuring. This means that they pay too much for their insurance!

This site from the Association of British Insurers can help you work out the rebuild value.

2. Get the right contents for your tenants it adds to the premium and you will pay.

If you are an experienced landlord you are probably aware of the standard of furniture and other items you will have within the property.

One of our customers once asked us to insure £50,000 worth of contents. On enquiry we found that the vast majority of this consisted of the family jewellery. It doesn’t make sense to retain contents at a property, if the property is being used by your tenants.

This landlord is an obvious exception but understanding the right value of your contents will enable you to get the right insurance price.

It is also worth remembering that you are only insuring your contents in the property, not that of your tenants. They will need to take out their own contents insurance for their possessions.

3. When employing a handyman/tradesman?

If you employ people to help with your properties you may need to ensure that you take out employer’s liability cover. You are responsible for these employees and if you gardener trips over loose wires that you or your electrician may have left out, you will want to be covered for the additional risk.

You can easily add employers liability insurance to your policy using our online quote and buy function. Get an employer's liability quote

4. Clumsy tenants?

Some insurance policies include different types of cover like accidental damage. If you have tenants who have young families you may wish to have this as an option.

Accidental damage under a landlord insurance policy is much the same as the terms under your usual home insurance. It simply insures your contents against accidental damage, such as a tenant dropping your television down the stairs.

Some of the landlord insurance providers also offer this as standard, so you might get a higher degree of cover for the same amount!

5. Water water everywhere?

Comparing quotes from providers is important. Some landlord insurance providers take into account different factors. One recognised name we work with has 11 different flood, theft and arson options. Another of our insurers is more concerned about the type of tenant you have.

This will help you work out the true costs of insurance before you buy a property and in some cases tell whether you are buying in a high risk area. Merely comparing landlord insurance quotes even before you buy your property will give you a good insight into all the costs involved in purchasing within a particular area.

Happy hunting
Hopefully you will have found the tips highlighted above useful.

Click here for an instant on-line insurance quote for your property now.

And if you are thinking of buying more property get a buy to let mortgage quote

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