What is landlord insurance?
It’s an insurance policy for your rental property, also known as buy to let insurance.
It can include buildings and contents cover, and protect you financially from loss of rent and third party claims.
Why do you need it?
Landlord cover isn’t a legal requirement but some lenders make it a condition of getting a buy to let mortgage.
Renting your property comes with more risks than living in the property yourself. This is because you’re relying on the tenant to pay their rent on time and look after your property. You also risk being liable for any accidents that occur in the property.
A standard home insurance policy doesn’t offer all the protection you need to minimise these risks but landlord insurance can.
What does it cover?
Most landlord insurance policies include cover for:
Buildings insurance: This covers the cost to repair or rebuild the property e.g. if it suffers damage from fire or flood. This can include permanent fixtures and fittings, outbuildings and boundary walls or fences.
Contents insurance: This protects your belongings e.g. furniture, appliances, TV and furnishings from theft and damage caused by fire and flood. Look for policies that include new for old replacements.
Third party claims: or public liability can protect you financially from a tenant suing you for an accident that happens in the property. Claim limits are usually over a million euro.
Loss of rent: If the property becomes uninhabitable due to damage, you can continue to receive the rent you would have got, up to a percentage of the building sum insured e.g. 15% of the rebuild cost.
Rent guarantee: If your tenants default on their rent for two or more months, you can claim the missed payments. You can also claim for loss of rent during the gaps between existing tenants leaving and new tenants moving in.
If these things aren’t included as standard, you may want to consider adding them to your policy:
Accidental damage: This covers unexpected mishaps e.g. a carpet spillage that may be expensive to treat or replace.
Home emergency cover: If there’s a problem with your heating, boiler or electrics, a professional will come and fix it, often 24/7 with this type of cover.
Legal cover: This may be included in public liability cover but check. If you have problem tenants, you may need legal advice and assistance in evicting them.
Unoccupied insurance: Some policies only cover your property if it’s unoccupied for up to 30 days which may not be long enough, for example to find new tenants. You can pay to extend this period if you can’t find a policy with the level of unoccupied cover you need.
What affects the cost?
The cost of the policy depends on several things including the:
Rebuild cost: of the property, the higher it is, the more you’ll pay. Here’s how to check the
rebuild cost of your property.
Property’s location: Areas with higher crime statistics will make your policy more expensive.
Contents cover: The more expensive your furnishings are, the more you’ll pay to protect them, especially if you opt for old for new replacement cover.
Number of tenants: The more there are, the higher the risk so you’ll pay extra.
Number of properties: you’re insuring. You’ll pay more for multiple properties than a single property but the price per policy may work out cheaper.
The type of tenants: e.g. professionals, families or tenants receiving housing benefit. You’ll pay more if your tenants are getting help to pay for the rent as they’re more likely to default on their payments.
Policy on pets: If you allow pets, it can increase the premium but it depends on the type of pet. For example, certain exotic pets or breeds of dog are more likely to bite someone which could result in an expensive liability claim.
How to make it cheaper
It’s important to get the cover you need rather than the cheapest policy, but here’s how to save:
- Ensure the property is secure and consider installing an alarm
- Only pay for the buildings and contents cover you need
- Shop around for like for like quotes
- Check for offers on new policies and multi policies with an existing insurer
- Buy online as you’ll often get a discount
- Pay upfront if you can, to save paying interest on monthly payments
- Only pay for the extras you need
Here are more ways to save money on your home insurance.
How to choose the right cover
If you’re relying on your rented property for an income and to pay the mortgage, it’s worth investing in the right insurance.
Check what different policies offer as standard and find one that matches your needs. Then consider any add ons you might need for increased financial protection.
Always read the full policy terms before you buy and cancel within the 14 day cooling off period if you’ve chosen the wrong cover.
Landlord insurance FAQs
Do I need buildings insurance if I’m renting out an apartment?
The building should be covered under the management company’s policy but request a copy to make sure.
You’ll still need to get landlord contents insurance for any belongings in the property and protection against things like third party claims and loss of rent.
Do I need landlord insurance if I have a lodger?
Having a lodger stay with you in your home is different from renting a property out to a tenant.
You should let your existing home insurance provider know you’re getting a lodger and see if they can add cover to your current policy or offer specialist lodger insurance. If they can’t help you, shop around and find an alternative insurer.
Make sure the policy covers any damage your lodgers may cause and liability claims against you e.g. if they have an accident in your home and are injured.
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