Whether you’re a landlord with one House of Multiple Occupancy (HMO) property or a whole portfolio, owning a buy-to-let property is a substantial investment and ensuring you have the right landlord insurance in place is crucial. Having the right landlord’s insurance gives you the safeguards and protection should something happen to the building or your tenants.
There are many different types of specialist landlord insurance and it will depend on your circumstances as to which cover options they build into a policy. This guide will detail some of the key areas to consider, but please speak to your insurance provider as the terms will vary between companies.
- Building and Contents Insurance for Landlords
- Boiler Cover
- Tenant Default Insurance
- Loss of Rent Insurance
- Malicious Damage Cover
- Landlord Emergency Insurance
- Alternative Cover
- Pet Damage Insurance
- Landlord Portfolio Insurance
-
1. Buildings and Contents Insurance for HMO Landlords
Landlord insurance, also known as buy-to-let insurance is different to standard homeowner insurance policies, because it is designed with the knowledge that the property is rented out. For landlords of HMOs, there is specific HMO landlord insurance designed to cover the unique circumstances of multiple occupancy housing enabling landlords to cover unexpected expenses should something go wrong.
If a property has a mortgage on it, then there is often a legal requirement by the bank that landlords buildings cover is taken out. This covers events such as fire, storm, flood, theft.
Contents insurance is often added which might cover the flooring, furniture or white goods, as well as replacement locks or alternative accommodation for tenants. This however does not cover a student tenants’ belongings. Students have to organise their own insurance for this.
2. Boiler Cover
Sometimes boiler cover is included, giving landlords peace of mind and ensuring tenants have access to heating and hot water and a quick repair should the boiler fail.
3. Tenant Default Insurance
If tenants should get into financial difficulty and default on their payments or if they stop paying after an eviction notice has been correctly served, tenant default insurance, also known as Rent Guarantee, enables landlords to claim for unpaid rent. This may vary for HMO landlords depending on whether there is a Guarantor in place for the tenatnts.
4. Loss of Rent Insurance
If a landlord suffers loss of rent due to a property not being habitable and tenants having to move out, this is different, and a loss of rent insurance policy would need to be taken out. This enables landlords to continue receiving the income whilst the property is repaired.
5. Malicious Damage Cover
Often malicious damage by burglars or vandals who unlawfully access and damage your property will be covered by your standard landlord insurance. However if your tenants deliberately damage or break items within the property, these are covered by a specialist malicious damage by tenants policy.
6. Landlord Emergency Insurance
If a landlord has multiple student properties or is personally located a distance away from the rental property, having landlord emergency insurance can provide that immediate action should an emergency arise.
Types of emergencies could be for example, leaking drains or plumbing, the heating system fail, damage to windows leaving the property insecure. In these emergencies, the insurance provider will get a contractor onsite within hours to secure or prevent further damage, covering the call out cost and labour charges.
7. Alternative Accommodation Cover
If there is damage to your property like a fire or flood and the tenants are required to move out, landlords often have an obligation as part of the tenancy agreement to provide alternative accommodation. This enables landlords to quickly claim should they have to pay out to find alternative housing for their student tenants.
8. Pet Damage Insurance
It is unusual for landlords to allow pets for student houses, but sometimes for Phd and mature students this may be allowed. Having pets can lead to additional repair costs for landlords if the pets damage furniture or fittings. With pet damage insurance adds another level of protection for landlords, should they have to claim during or at the end of a tenancy. This type of insurance is usually an add on to the landlords insurance policies rather than a stand-alone policy.
9. Landlord Portfolio Insurance
Many insurance providers have policies designed for landlords that own more than one rental property, this is called Landlord Portfolio Insurance. It means that landlords only have one policy and it can be altered or properties added to it very easily, reducing the paperwork for landlords.
Which Landlord Insurance do You Need?
There are many landlord insurance providers out there providing a range of policies and more information on the different types of cover. As every landlord’s situation is unique, it will be important to contact the insurance providers to ensure the correct level of cover is purchased.
Direct Line have a Knowledge Centre, and Simply Business and Endsleigh have dedicated sections on their websites for Landlords.
Supporting Landlords with their Rental Properties
Whilst landlord insurance enables landlords to have peace of mind in the event of an emergency or disaster, our team at digs can provide the other side of the coin, ensuring the right tenants are found for your property and the rental yield is maximised.
We’ve been working with landlords and providing property management in the Bristol area for 23 years so if you’re looking for a lettings agent why not contact us?
Disclaimer:
The types of insurance listed here are generic policy options. Not all policies may be offered in every location. We advise that you check with your insurance provider as to the different policies they cover for your specific property and location.
Other useful blogs for landlords :
Valuing a buy to let property. How much should student landlords charge?
Information about Student Tenancy Deposits
