Landlord Insurance in the UK Explained

Did you know? 1 in 4 landlords have inadequate or no insurance protection! Before applying for landlord insurance, there is a lot that they should know about their insurance cover. Their property, as well as the people who reside in it, require different levels of protection. Landlords need to consider what type of cover they want and how much cover they need. The following article from FamilyMoney, will cover some points on landlord insurance in the UK for older residents.

YOUR GUIDE TO LANDLORD INSURANCE IN THE UK - Family Money

What is Landlord Insurance?

A landlord insurance cover protects landlords from risks associated with their rental property. It comes in varying types designed to cover varying risks, as discussed below. Some of the risks possibly covered include:

  • Damages to the property by tenants and emergency repairs
  • Liability for injuries or losses incurred on the property
  • Emergency overnight accommodation for tenants
  • Loss of rental income
  • Alternative accommodation for tenants
  • Theft and vandalism
  • Accidental or malicious damage
  • Replacements for locks and lost keys

Many of these risks could cost you thousands in damages – some risks could also leave you debt-ridden for years! Consequently, landlord insurance is an integral aspect of managing properties. It offers you peace of mind by knowing that your insurer will cover any damages.

What are the Types of Landlord Insurance?

Rental property is associated with many risks. The most common risk is that your tenants will fall back on their rent, resulting in financial losses. Additionally, a fire could break out and burn everything down. The property could also be in the path of a storm or natural disaster. A hundred things could go wrong, and they all would involve significant financial losses for you and your tenants.

Fortunately, there are different types of landlord insurance to cover different types of risks. Some of the most common and popular include:

Landlord Buildings Insurance

Landlord buildings insurance protects against damages to the building. This includes accidental damage that could alter the building’s structure. Common examples include:

  • Falling trees and branches
  • Earthquakes, floods, and other natural disasters
  • Fires
  • Collisions by vehicles

Damages to the building’s structure can be pretty expensive. For example, an earthquake could compromise the building’s foundation, making it unsafe to live in and necessitating demolition. You could lose a fortune, and that is why you need landlord insurance!

However, it is worth noting that this insurance covers only the building structure. It doesn’t protect belongings inside the building – you need contents insurance cover for that.

If you have five properties or more, you will need specialist landlord insurance for multiple properties. - Family Money

Landlord Contents Insurance

Contents insurance covers the items inside the building against risks such as theft or damages – however, it doesn’t provide cover against an item’s natural degradation over time. Anything inside the building can be termed as content, including furniture, electric appliances, and décor. However, it is worth noting that cover only applies to the landlord’s (not the tenants’) possessions.

You may choose between limited and comprehensive cover, whereby limited cover only covers some things inside the building while comprehensive cover includes everything.

Limited cover is more affordable than comprehensive cover, and you can cover only your most valuable possessions. Landlord contents insurance is especially advisable for landlords who offer fully-furnished property to let.

Landlord Liability Insurance

You are responsible for the safety of everyone on your property. Tenants and visitors can sue you for millions and win if something happens to them because of your negligence.

It is challenging to ensure that everything on your property always works correctly. For example, a wire could become exposed without anyone noticing, creating the risk of electrocution. Alternatively, a tile could come loose, creating a risk of tripping and falling. The injuries could be severe, and the victims could sue you for six figures, potentially even more than your rental property is worth.

Landlord liability insurance protects against the cost of legal suits for injuries or damages incurred on your property. Cover amounts vary greatly, and they can range from a few thousand to millions, depending on the types of tenants and underlying risk factors.

Landlord insurance protects you when a tenant sues - Family Money

Property owners’ liability protects against legal liability for personal injury or property damage suffered by third parties on your rental property.

The landlord’s legal expenses insurance is also worth mentioning, protecting against related and unrelated legal expenses. For example, it covers the legal costs incurred when evicting a tenant.

Landlord Rent Guarantee Insurance

Your tenants would pay their rent in time in an ideal world. However, rent defaulters are common, and some tenants can go for months without paying. Sometimes there isn’t much you can do to get tenants to pay their rents, which is where landlord rent guarantee insurance comes in.

Landlord rent guarantee insurance is also referred to as tenant default insurance. It reimburses you for unpaid rent for a limited period, ranging from one month to a year or more. However, the landlord must demonstrate that they did their due diligence when crosschecking the defaulting tenants’ financial backgrounds and credit histories to ensure that they can pay.

It is also worth mentioning a related landlord insurance cover known as loss of rent insurance. This cover pays you rent for a limited period when your property becomes uninhabitable due to unforeseen issues such as damages from fires and floods.

Landlord rent guarantee insurance will reimburse you for unpaid rent for a limited period.

Landlord Home Emergency Insurance

Rental property requires regular maintenance to ensure that everything works properly. Some of the common issues to look out for include clogs in the plumbing system and complications with the HVAC system in extreme weather.

It is crucial to get such problems remedied as soon as possible to prevent them from getting worse. Landlord home emergency cover offers 24/7 access to emergency home maintenance and repair services.

Is landlord insurance tax deductible? Yes, typically, landlords can claim the expenses of running and maintaining their property. This includes the cost of landlords insurance, to reduce their tax bill. Any expenses claimed should be incurred wholly and exclusively as a result of renting out the property.

How Much Does Landlord Insurance Cost?

The cost of landlord insurance varies drastically depending on the type of cover you elect. Some of the most influential factors include:

  • The type of property insured
  • The location of the property
  • The type of tenants
  • The cost of rebuilding the property
  • The type of insurance chosen;
  • The likelihood of making a claim

Ideally, the sum insured (the amount you stand to get for a claim) will equal the property’s cost of rebuilding.

Rent guarantee insurance policies usually require an excess equivalent to one month’s rent. The excess depends on factors such as your likelihood to make a claim, and it determines the policy’s overall cost.

You could also add accidental damage cover to your landlord insurance, which would cover spills, breakages or damages caused by your tenants. You can obtain a landlord insurance quote and arrange precisely the level of cover you feel you need.

If you are looking to renew your landlord insurance, read this first.

Age can positively or negatively affect your landlord insurance premium. - Family Money

How Does a Person’s Age Affect Landlord Insurance?

Many insurers factor in the age of the property when calculating an insurance policy’s cost. Interestingly, the landlords’ and tenants’ ages also matter.

Age can be a good or bad thing for your premiums. Seniors are more observant of property safety and maintenance measures – for example, they don’t throw parties that would leave visitors nursing injuries or possibly cause a fire outbreak. Consequently, an insurer can use this to lower their overall level of risk, thereby reducing their premiums.

Older age tends to make people clumsier. For example, seniors often forget to turn the stove off, increasing the likelihood of a fire. Many senior tenants also require extra amenities (contents) such as a wheelchair ramp or stairlift, increasing the cost of contents insurance. Additionally, senior landlords aren’t very keen on their properties’ maintenance. In this case, the insurer would increase the premiums to cover the additional risks.

It is also worth noting that insurers consider your claims history when calculating premiums. Senior landlords who have been managing rental properties for a long time may have more claims in their record, resulting in higher premiums.

Age can positively or negatively affect your landlord insurance premium. - Family Money

Finding Cheap Landlord Insurance Over 50

Landlord insurance doesn’t have to be expensive because of your age. Here are four tips on how to find cheap landlord insurance for seniors:

  • Avoid Making Small Claims
  • Avoid making small claims - Family Money

    Your claims history determines your insurance premiums. It is advisable to avoid making small claims that you can settle yourself. Instead, reserve your insurer for big claims that are too expensive to pay out of pocket.

  • Hire a Property Manager
  • Hire a property manager - Family Money

    Old age can compromise your ability to manage the property and conduct regular maintenance. This is a red flag for insurance companies, and it can increase your premiums considerably. As such, it is advisable to hire a property manager to ensure that everything runs smoothly – this is always a good sign for most insurance companies, regardless of the landlord’s age.

    Hiring a property manager will help reduce your work and the likelihood of costly risks. Additionally, the amount saved in premiums can help offset the cost of hiring a property manager.

  • Avoid Unnecessary Cover
  • Avoid unecessary cover - Family Money

    Do you need cover against earthquakes if your property is located in an area not prone to earthquakes? It may seem prudent, but it only adds to the cost of your landlord insurance policy. As such, insure your property only against credible threats. It is also essential to compare landlord insurance policies to ensure you get one that is right for you.

  • Avoid Problematic Tenants
  • Avoid Problematic Tenants - Family Money

    Can your tenants afford the rent, and will they pay on time? Do they like partying and having guests over? Are they too old and need extra amenities such as stairlifts? All of these factors can add to the overall cost of your landlord insurance policy. As such, it is advisable to conduct thorough background research into your tenants to ensure that they will not pose problems down the road.

Home Insurance for Landlords Over 60

Landlords aged 60 and older can also benefit from the tips discussed above. It is also worth noting that some insurance companies offer a maturity bonus for landlords aged above 55 years old. Additionally, you can get extra credit for your loyalty if you work with the same insurance company for a long period of time, or have other policies with them.

Best Landlord Insurance Over 70

Landlords aged 70 years old and above may face greater scrutiny when applying for landlord insurance. As such, it is advisable to ensure that everything is in order, including performing regular maintenance. It is also advisable to hire a property manager to instill confidence in your insurer that you can keep the property operating safely.

Frequently Asked Questions about Landlord Insurance

Here are answers to some of the frequently asked questions about landlord insurance in the UK:

Is Landlord Rental Insurance Worth It?
Yes, landlord insurance is worth it in every aspect. Property is a costly and valuable investment that should be protected at all costs. However, it is vulnerable to many risks, as discussed earlier. These risks result in expensive damages, and landlord insurance helps offset the cost of rebuilding. Landlord insurance also offers peace of mind through the guarantee of financial security.
Are You Required to Have Landlord Insurance in the UK?
Having landlord insurance is not a legal requirement in the UK. However, most mortgage lenders won’t work with you if your property is not insured. Additionally, managing a rental property without landlord insurance is betting on luck, considering all the underlying risks – that beats any incentive or legal requirement.
What’s the Best Way to Get Landlord Insurance Quotes?
Different insurance companies will offer varying landlord insurance quotes and deals, depending on the factors discussed earlier. As such, it is advisable to compare landlord insurance quotes from different providers and pick the best one based on your needs and preferences. The best landlord insurance policy doesn’t imply the cheapest – instead, choose one that offers the best value for its price and protects against the most pressing risks.
Where Can You Buy Buy-To-Let Insurance?
You can buy buy-to-let insurance from one of the hundreds of property insurance companies across the UK. You can find these insurance companies online by browsing their websites and other online platforms. Alternatively, you can ask your financial advisor or insurance broker to find you one. Remember to compare quotes and each insurer’s scope of cover before signing up

Final Thoughts

Landlord home insurance is one of the best ways for property owners to protect their rental property. As a senior, you cannot afford to pay a fortune to keep your rental property running correctly.

Fortunately, landlord insurance will pay for any damages to the property and your tenants. Remember to shop around and compare quotes to get the best deal on your insurance cover.

Jump To A Category

Quick Read: Money Magazine