May 18, 2022
What insurance do I need as a landlord in the UK?
As any landlord will know, letting a property is not without risk. But there are things you can do to cover yourself. Like making sure you have the right insurance in place.
Insurance isn’t a legal requirement for those letting property. But is heavily recommended. And landlords are urged to get a number of quotes before deciding on insurance cover.
For buy-to-let mortgages, too, which most landlords have, it is a requirement by most banks for landlords to have insurance.
Below, we explore in-depth what instances UK landlords need insurance and how costly it’ll be.
1/ Buildings insurance
If you rent out a property and you’re the freeholder, then you need to have landlord buildings insurance as part of your landlord policy. You can buy building insurance as part of your landlord insurance policy.
Keep in mind that a normal residential building insurance policy will usually be invalid if you rent out your property. So we recommend a cover specifically designed for landlords.
Landlord insurance will offer you cover for the building or structure in the event of:
- Accidental damage,
- Lightning, fire explosion or earthquake,
- Riot, civil disturbance or malicious acts,
- storm or flood,
- escape of water
This would also cover the insurance of built-in terms such as kitchens, bathrooms, and boilers in most instances. As such, you need to confirm that the property is insured for its full rebuilding cost. Which includes professional fees and the cost of site clearance.
An expert can advise you on calculating the rebuilding cost, which is often much less than the market value.
2/ Contents insurance
Depending on whether or not you’re renting out a furnished property will determine if contents insurance is a necessary component of your landlord policy.
You may want to consider insuring certain upholstered furnishings or free-standing white goods. Such as fridges and washing machines, as part of the tenancy agreement.
If you had to replace all of those items after a damaging incident has occurred, then the contents cover will provide you invaluable peace of mind.
3/ Buy-to-let insurance
Landlord insurance will give you cover against claims should tenants injure themselves on your property and you’re found to be at fault. Landlord insurance will also cover you for unpredictable events like vandalism, fire, or flood.
Buy-to-let mortgages come with higher interest rates and higher fees. And you’ll often be expected to put down a larger deposit compared with personal mortgages.
Be sure to work out the figures carefully and get financial advice.
Once you decide to proceed, shop around to find the best deal. Your personal mortgage provider may not give you the best offer.
4/ Insurance for a flat
In some cases, the freeholder will have the building insured when you have a leasehold for a flat or part of a building. In this instance, you should tell the freeholder that your flat is rented to make sure the cover is appropriate. The option to take out other landlord insurance like property owner’s liability cover and landlords’ content insurance is still at your disposal.
5/ Is insurance needed if you live in the property?
When you rent out part of your property, then normal home buildings and contents insurance policy is unlikely to be valid. Even if you live in the property.
Instead, a specialist landlord insurance policy is needed. And when bought you will have to tell the provider that you also reside in the house.
Make sure to have a tenancy agreement in place for your insurance policy to be valid. Because under this the tenant is usually granted exclusive use of at least one room, and you can’t enter without permission.
Lastly, remember to tell your mortgage lender that you’re renting out part of your property. Otherwise, you might find yourself breaching the terms of your mortgage.
With so much to factor in, it’s vital that you work with an experienced, well-respected letting agent.
If you have any questions about insurance coverage in the London area, Atkinson McLeod is here to help.
To find out more about our services and current operations, please get in touch with our expert team today. You can find out how much you could be charging in rent with our free and instant online valuation here.