Landlord Insurance: What does it cover?
Summary
While landlord insurance is not a legal requirement, it is highly recommended for property owners renting out premises, as it protects against the unique risks associated with letting. Typical coverage includes building insurance (for structural damage), contents insurance (for the landlord’s belongings), liability insurance (for harm to tenants or visitors) and sometimes loss of rent protection, though exclusions apply for things like tenant defaults or wear and tear.
Although it is not a legal requirement, landlord insurance is highly recommended. Landlord insurance is a specific type of insurance that protects landlords from the risks associated with renting out a property.
Table of contents
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Landlord insurance can typically include:
- Building Insurance
- Contents Insurance
- Liability Insurance
- Loss of rent protection
Let’s break down the individual parts of landlord insurance and how it protects the policyholder.
Does Landlord Insurance include building insurance?
Yes, landlord insurance includes building insurance, which means the property’s structure will be covered in the event of damage or if it needs to be repaired.
Building insurance includes:
- Structure: The structure of your building will be covered in the event of damage. This includes roofs, floors and walls.
- Permanent fixtures: This includes fitted kitchens, bathrooms, and even built-in wardrobe
- Other structures: Some policies cover garages, sheds and even fences within your property.
- Repairs & Rebuilding: When your property is insured with landlord insurance, you will be covered in terms of damage caused towards the structure of your property. Your property’s repair will be covered to rebuild it to its pre-damaged state.
What isn’t covered:
- Wear & Tear: Any damage accumulating over time, such as worn-out carpet or fading paint.
- Neglect: If damage is caused to your property due to neglect, such as if an existing issue is ignored and becomes a bigger problem, your insurance policy may not cover this.
Does Landlord Insurance include contents insurance?
Yes, however, it may not work the way you think. The contents insurance included within landlord insurance only covers the landlord’s belongings within the property.
Landlord contents insurance includes:
Protection of Personal belongings: Landlord contents insurance will cover the landlord’s items they have allowed the tenants to use, such as furniture, appliances, carpets and curtains.
These belongings are covered in the event of fires, theft, accidental damage, or even loss.
What isn’t covered:
- Tenants’ Belongings: Landlord contents insurance will only cover the personal items that the landlord owns. The policy will not protect the belongings of the tenants.
- Wear & Tear: If items within the property experience damage due to general wear and tear, this would not be covered by contents insurance.
Does Landlord Insurance include liability insurance?
Yes. If the condition of your rental property is the cause of a tenant or visitor’s injury, your landlord insurance will include liability to cover that.
Accidents can occur due to the smallest of issues, such as a loose tile or an exposed wire, and you, as the property owner and landlord, will be held accountable if these conditions cause injury. That is why it is essential to have a landlord insurance policy to protect you from such occurrences.
What isn’t covered:
- Damage to your property: Liability would not cover any damage caused to your property. Luckily, landlord insurance includes building insurance, covering any damage to your property.
- Intentional Harm: Liability will not cover you if you intentionally cause harm to tenants.
Does Landlord Insurance include loss of rent protection?
Not always. It will depend on your policy and the type of coverage you have. If loss of rent protection is included within your insurance policy, you may be covered in certain situations. For example, if your property experiences a disaster, such as a fire or flood, which makes it uninhabitable, you will be covered for the loss of rent.
However, if you are in a situation where your tenants are refusing to pay rent, you may not be covered. This is where you will need specialist cover, such as tenant default insurance.
Conclusion: Benefits of Landlord Insurance
As mentioned at the beginning of this article, landlord insurance is not legally required. However, it does protect landlords from significant financial loss. It covers the property if structural damage occurs or your contents are lost or stolen. It also has the potential to protect you from loss of rental income in the event of damage causing your property to become uninhabitable.
Remember: when you purchase a landlord insurance policy or let property insurance policy, ensure you understand what is or isn’t included. This is so that you, as the policyholder, can have peace of mind that your property is protected in the way that best suits you.
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