If you are looking to mortgage a buy-to-let property, it’s very likely that your lender will insist that you have insurance on the property before they agree to release the funds. By not having insurance on your rental property, you could also be in breach of your terms and conditions with your mortgage lender.
As a minimum, landlords will be required to have buildings insurance and property owners liability insurance to cover the risks related to their rental activity. Landlords will also have the option for additional cover related to contents, accidental damage, and other areas depending on their needs.
When looking for landlord insurance, you want to make sure that you find a policy that meets your needs so that you don’t overspend and buy cover for things that you won’t need. You also want to make sure that you do not pay too much for the policy either. Having used many insurance companies, I would recommend InSync Insurance.
Landlords Buildings Insurance
Your buildings insurance will need to meet the equivalent cost of having the property rebuilt. If the property is completely damaged as a result of a flood or fire, the buildings insurance will cover the rebuild costs.
It’s important to make sure that you do not under estimate or over estimate the cost of rebuilding the property for insurance purposes. The easiest way to calculate the rebuild cost, is to measure the length and the width of the property from outside, and then multiply the two numbers together. You can measure the property in either meters or feet.
Once you have the measurements, you can register to use the free online Building Cost Information Service (BCIS) calculator. You will simply need to enter the measurements, number of floors, bedrooms and style and type of construction for a cost of the rebuild for your insurance policy.
You will notice that the rebuild cost will be lower than the total value of the property. This is because the total value also takes into account the cost of the land, the location and the desirability of the property.
Property Owners Liability Insurance
As a landlord you have a duty of care to your tenants to make sure they are living in a safe environment. But accidents do happen and property owners liability insurance is similar to public liability insurance for businesses.
If your tenants suffer a personal injury from an accident whilst living in your property, your owners liability insurance will cover the costs and damages awarded to your tenants if they suffer an injury or any damage to their possessions. This can include anything from the tenant tripping on a loose carpet to a roof tile falling and hitting the tenants parked car.
Property owners liability insurance will cover your legal costs in defending a claim, and the tenants legal costs, if you are found to be liable. The insurance will also cover any member of the public who visits the property too. Whether it’s a friend of the tenant just visiting or a tradesman who is there to carry out some work.
Essentially, you will be covered for any injuries or damages that occur on the premises, even if it could be deemed that the incident could have been prevented by the owner or managers of the property.
The Cost Of Landlord Insurance
I recently paid £210.94 through InSync Insurance to insure a rental property for a year which includes £200,000.00 of cover for buildings insurance, £2,000,000.00 of cover for property owners liability insurance and £4,000.00 contents and accidental damage cover because I let the property fully furnished.
The property is let to four students. In contrast, I received the following quotes from other companies when using a comparison site:
|Covea Insurance PLC||£23.25||£232.49|
|Liberty Mutual Insurance||£39.53||£351.39|
|Great Lakes Insurance||£52.35||£465.31|
|AXA Insurance UK PLC||£52.67||£468.16|
Landlord Insurance For Multiple Properties
There are some companies who provide insurance cover for multiple properties and InSync Insurance is one of them.
For landlords who have a portfolio of properties, it can be beneficial to insure all the properties on a single policy which will still provide the right level of cover for each rental property. This can save the landlord time in having to renew several policies throughout the year.
In addition, the more properties a landlord includes on a single policy, the better value for money they will likely receive with insuring each property.
Other Considerations For Landlord Insurance
There are two other types of insurance cover that you may want to consider as a landlord. They are:
Landlord Emergency Cover
This is often offered as an optional extra on most landlord insurance policies and it can help recoup the costs of emergency callouts and repair bills.
Policies can provide different types of emergency cover so it’s important to take the time to understand exactly what you will be getting for your money. In general, you will covered 24 hours a day, 365 days a year for the following scenarios:
- Heating and plumbing repairs including burst pipes and boiler breakdowns.
- Utility supply failures including water, gas and electric.
- Damage to the roof that causes a sudden leak.
- Blocked sewer and drain problems.
- Damage to doors and windows that compromise the security of the property.
- Pest infestation.
Rent Guarantee Insurance
This provides cover for your rental income if your tenant fails to pay rent for at least 2 months.
Landlords will need to perform the necessary credit and background checks on their tenants during the vetting process in order to qualify for the rent guarantee insurance.
Policies also include cover for legal expenses, should landlords need to seek to gain possession of the property if the tenant continues to fail to pay their rent for more than 2 months.
Additional Benefits When Using InSync Insurance
One thing that really surprised me when I visited InSync Insurance, was that someone telephoned me to confirm my requirements for the type of insurance I was looking for.
I know that by entering your details online, you can be provide with quotes within seconds on comparison websites, but talking to someone in real time who is also able to answer questions you may have regarding the type of cover you are looking to purchase, is a great benefit in my opinion.
If you are unsure about any aspect of purchasing landlords insurance, I can highly recommend talking to InSync Insurance. They will do all they can to assist you in making sure you have adequate cover whilst helping you to avoid any unnecessary cover depending on your needs.
And there’s more … If you purchase a policy, you will be invited to sign up for InSync Benefits where you can get discounts on experience days out, gym memberships, clothing, gadgets, tech, high street vouchers and more. They have partnered with brands including Apple, Currys PC World, Virgin Experiences and Argos to name only a few.