Landlord Insurance

If you are a landlord renting out your home, you still need insurance to protect the building from disasters such as flood or fire. But a standard buildings insurance policy is likely to be invalidated if you are renting to tenants.

Instead, you need specialist landlord's home insurance which will provide cover for some of the risks you face as a landlord. You also need to make sure you have complied with safety laws such as installing a smoke alarm and fire doors as well as having gas and electrical equipment checked annually, otherwise claims could be turned down.  

One of the most important reasons to have landlord's insurance is because you are protected against public liability as standard. This means that if a tenant were to be injured in your home and launch a legal action against you, you would be covered for the costs.

Specialist add-ons

Landlord's insurance can also come with optional add-ons for other costly situations that you may wish to insure against, such as loss of rent following damage to the property through an event such as flood or fire. Some policies also guarantee your rent in case a tenant refuses to pay or leaves without paying and legal costs if you need to go to court to evict your tenants. Normal home insurance won't provide cover for these kinds of risks.

It's important to make sure your landlord's policy covers your particular renting circumstances, for instance, some landlord policies won't offer you cover if you are renting to housing associations, local authorities, students or asylum seekers

With buy-to-let flats, the communal areas and the roof should be covered by the freeholder's insurance though you will be expected to share this cost with the other owners in the block. You need to examine the insurance documents before you buy the flat and check them if the insurance company is changed on renewal.

Contents insurance

If you are letting your property furnished you will also need contents insurance, though the tenants need to insure their own belongings. For this reason, you shouldn't need to pay for a high level of cover, so make sure you don't over-insure. You can get contents-only insurance if the rest of your property is covered by the freeholder's insurance. Consider policies with 'new for old' cover since replacing furniture and carpets will be expensive.

Don't just take the first policy offered to you by the bank or building society with which you have a mortgage on the property. Compare prices and the level of cover available by doing some research online.