It is advisable for individuals to take out landlord property insurance, rather than to rely on the standard homeowner policy. The latter will often not cover the most common issues landlords face when letting properties to tenants. As the reason we take out insurance is to for peace of mind and to safeguard the asset, there is little point in doing so if the cover is not fit for purpose. Insurance for landlords differs from standard domestic cover in a number of key areas. The principal additional cover that landlord property insurance provides includes the following:
If your property or properties has communal areas landlord cover will protect communal fixtures and fittings, such as televisions, gates, fences, driveways, gardens and garages. If there is any damage to these items, tenants may be unwilling to agree where the fault lies or to accept responsibility for repairs. Landlord property insurance can provide protection to fix the damage.
Specialist cover can also protect against malicious damage and vandalism, whether caused by a tenant or their guests. When a landlord does not live at the property, they are somewhat at the mercy of the goodwill of the tenant(s). If a dispute were to arise, the landlord is potentially vulnerable to damage being caused maliciously, particularly in cases where the tenant is about to leave the property. This type of damage differs from accidental damage in that it is considered a criminal offence. Therefore, when making an insurance claim, the landlord needs to notify the police and obtain a crime reference number.
Specialist cover also protects landlords against public liability claims. These can arise where injuries are sustained by tenants or their guests, while on the property, or where there is third party property damage. Public liability cover protects the landlord against claims, whether brought by a tenant or another person, and can be of great benefit to the landlord in avoiding a potentially costly court case.
Landlords who employ people to provide general property maintenance are considered to be that person’s employer. If the individual were to have an accident or suffer an injury while undertaking their duties, the landlord may be liable for any claims including fines or penalties. Examples of workers who fall within this category are domestic cleaners, rent collectors, caretakers, ground maintenance staff and administrators.
Landlord property insurance can also offset loss of rent from non-paying tenants. This type of cover applies to situations where tenants are being evicted and provides for payment of a proportion of the rent between a successful eviction and sourcing of new tenants. The cover often provides for up to 50% of the rent and generally lasts for up to three months. Rent guarantee insurance usually covers the costs of legal action in pursuing costs for rent, damage to property and the costs arising out of removing squatters. Where a landlord is uninsured for this eventuality, the cost of pursuing an action may be high and the inconvenience considerable.