What Does Landlord Insurance Cover?

What does landlord insurance cover? While policies vary, the aim of landlord insurance is to protect your financial interests in buy-to-let property.

In practice that mainly refers to the physical structure of the building so that if it were destroyed it could be reinstated and the insurer would cover the cost.

That’s just like normal home insurance, but that cannot be used for let property. Landlord insurance instead takes account of the additional risks of let property and is priced accordingly.

Then there are additional covers like property owner’s liability cover and cover for lost rent. We’ll go through these in detail here, or you can jump right in and get a fast quote from us online now.

What Does Landlord Insurance Cover?

Buildings Value

Like normal home insurance landlord insurance includes buildings cover. While this isn’t essential it is a good idea to protect your valuable property. If you have a buy-to-let mortgage then you are probably required to have landlord buildings insurance to protect the lender’s interest in your property.

You should insure your buildings based on their rebuild value. Note that isn’t the same as the market value because you already own the land and the cost building a property does not always reflect what it’s worth on the market.

Imagine building a cottage for £20,000 on a patch of land you owned in Mayfair. The market value would be a lot more than the £20,000 it cost to build.

But rebuild values – also known as reinstatement costs – do vary based on location and local economy. Chances are building your cottage in Mayfair would cost a lot more than it would in Derbyshire.

The most accurate way of getting your rebuild value is to get a professional assessment but for an estimate the Royal Institute of Chartered Surveyors have a helpful rebuild cost calculator.

Your need for buildings cover is likely to be affected by the type of property you own. If you need landlord insurance for a leasehold flat then this is probably the responsibility of your freeholder.

On the other hand if you are responsible for insuring a block of flats then you should consider freeholder buildings insurance.

Landlord Contents Insurance

In general contents cover is less of a concern for landlords. However, many landlords do have a small amount of contents in a property such as carpets, curtains and furniture. These can add up to quite a large amount and so you should consider this when getting landlord insurance.

At Emerald Life we provide £5000 of landlord contents insurance free with every policy.

Landlord contents cover can include items such as:

  • Carpets
  • Curtains
  • Appliances
  • Furniture
  • Garden ornaments
  • Pictures
  • Televisions

Keep in mind though that landlord contents insurance only includes landlord’s contents. Anything belonging to tenants is not covered and so they should consider getting their own contents insurance.

Property Owner’s Liability Cover

Even if you have a let property without a mortgage and are willing to ignore the risk of damage to buildings and contents, there is another risk you cannot control.

If your property causes harm to someone or something then you are liable.

That could be something falling off the roof or a tenant or visitor tripping on a carpet. Accidents like that could result in you getting sued – even if you’re not at fault.

Lengthy legal battles are incredibly draining both emotionally and financially.

Landlord legal insurance can cover your legal costs should an accident happen. This usually comes in bands of £2 million or £5 million, as it does in our landlord insurance at Emerald Life.

Lost Rent

Landlord rent guarantee insurance is an interesting product that aims to cover rent payments.

At Emerald Life we offer cover for lost rent if your property is made uninhabitable. So imagine disaster has struck and while you’ve made a claim to get the damage repaired your tenants won’t be hanging around and continuing to pay you.

After the ordeal of a claim and any additional costs on your part, you don’t want to be without those regular rent payments – especially if you have a buy-to-let mortage. That’s where we can help.

There are also products out there on the market that offer rent guarantee insurance if your tenants are in rent arrears and need evicting. These can cover lost rent and legal fees while you are going through the eviction process.

Types of Tenants

When asking what does landlord insurance cover a big part of the question is actually “who” does it cover.

The whole point of landlord insurance as opposed to home insurance is that you are not resident in the property and are instead relying on other people to live there respectfully.

Therefore, part of the risk rating and pricing of landlord insurance is the types of tenants you have and how many.

In general a HMO with students or DSS tenants is regarded as higher risk than a house with a professional couple resident.

Some landlord insurance providers won’t be willing to cover certain types of tenants. But not Emerald Life. We cover all types of tenants.