Landlord insurance explained

There is one main reason why people become landlords – to achieve as much income from the property investment as possible. With this in mind, it might be tempting to reduce any outgoings that seem optional, such as landlord insurance. Yet skipping a landlord insurance policy is a serious mistake that could prove expensive.

What landlord insurance covers

You should look for a policy that includes public liability cover, the cost of emergency accommodation, protection against loss of rent, contents insurance and emergency call-out costs such as replacing window panes and locks. There are also many additional policy areas that can be added according to your preference, such as malicious damage cover.

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Why do you require protection as a landlord?

Even if you take your responsibilities as a landlord very seriously and find the ideal tenants, you still undertake financial risk by letting out a property. Let's look at the most important types of risk faced by landlords.

  1. Public liability
    If a tenant or visitor to the property is injured or their property is damaged, they may claim that you are liable because you did not maintain the property adequately. Even if you take the greatest care, you might miss defects in the property; a ceiling which is about to collapse, faulty joints on furniture or loose pieces of carpet. An injured person could claim compensation, lost earnings, out of pocket expenses, plus legal costs – the total sum can be ruinously large as well as taking up a lot of your valuable time.
  2. Emergency accommodation
    If the property becomes uninhabitable for a period, for instance due to flooding, an electrical fault or rodent infestation, your tenants are likely to require you to provide alternative accommodation. This can prove expensive, especially when you are still paying the mortgage and funding remedial works to make the property inhabitable again.
  3. Loss of rent
    There are many reasons why you might lose rent. Tenants might become unemployed and be unable to pay, or they might leave the property at short notice, leaving you struggling to find a replacement tenant. There may be a dispute about the property, for example a faulty heating system, and the tenants without rent as a protest. Whatever the reason, the loss of expected rental income can strain your finances.
  4. Emergency call-out costs
    You could face steep charges for emergency call-outs, for example a plumber to stop a leak, or a glazier and locksmith to make the property safe after a break in. Emergency call-outs usually cost substantially more than routine visits and it's not always easy to find someone who is able to attend in an emergency.
  5. Contents insurance
    If you have spent money on flooring, fittings and furniture in the property then contents insurance is a good idea to protect your investment. Even if your tenants are highly responsible, damage can still occur – for example, you might move a sofa to find carpet underneath has been eaten by moths. Tenants should take out their own insurance for their property.
  6. Malicious damage
    One of the most infuriating types of damage you can experience as a landlord is malicious damage, when a disgruntled tenant decides to leave a few surprises before moving out. This might be graffiti, holes punched in the walls, smashed windows, stains on the carpet – the damage can easily add up to far more than the tenant's deposit. Plus paying for this type of damage yourself makes it all the more irritating – making an insurance claim softens the blow.
  7. Legal expenses insurance
    In addition to the prospect of being sued if someone is injured or their property is damaged in your property, there are many other potential legal costs you may have to face as a landlord. This includes repossession proceedings, property protection, debt recover, tax protection and contractual disputes. Legal expenses insurance means these legal costs are covered by your insurer, rather than coming out of your own pocket.

Do you have the right level of protection?

Being a landlord is a huge responsibility, but with the right level of insurance you can be assured that your property investment does not risk your financial security. Why not contact Stride to discuss your insurance needs?

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Need help finding the exact insurance for you? Get insured
Need help finding the exact insurance for you? Get insured