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POSTED 19 November 2018 Lettings

What is Landlords' Insurance - What does it cover?

Being a landlord isn’t always easy, with plenty that can go wrong when you hand over the keys to your property. What’s more, if something does go awry, you’ll normally have to foot the bill – so it’s often a good idea to have landlord’s insurance in place.

What is landlords' insurance?

As the name suggests, landlord insurance covers a rental property’s owner from a number of common perils. These generally include things such as fire, lightning, flood, the escape of water or oil, subsidence, theft and malicious damage. There is also the option to insure any content that belongs to you inside the property.

Unlike motor insurance and employer’s liability insurance, landlord insurance isn’t compulsory; however, some lenders make it a requirement of taking out a mortgage on a rental property.

How much does it cost?

All landlord insurance policies differ, so there is no one answer to this question; however, each property that you insure will probably cost you anywhere between £120 and £220.

There are a number of factors that can influence the price of a policy, these include:

  • The property: An older property can be more expensive to insure because there are likely to be more faulty components. Similarly, a larger property may have more components in it, so may be more expensive to cover as a result.
  • Your tenants: If you’re renting out a property to a middle-aged couple, your policy is likely to cost less than if your tenants are students.
  • Location: Properties in certain parts of the country can be more expensive to insure for landlords, with those located in London and the South East generally at the higher end of the scale.
  • Multiple properties: Obviously, the more properties you have to insure the more you are going to have to pay. However, if you insure more than one property, you can expect a discount off the total price of each individual policy – as long as you insure each property with the same insurer.
  • Add-ons: As we have mentioned above, each insurance policy is different, with plenty of optional extras that you can choose from, such as accidental damage, terrorism, legal protection, alternative accommodation costs, rent guarantee insurance and liability insurance.

Keeping your costs down

In general, the above points are the main factors that will affect the cost of your insurance. However, you may be able to save a little more by:

  • Securing your property: An insurer may be more willing to lower a quote on a property that is fitted with certain security measures, such as a five lever mortice deadbolt on the front door, locks on the windows and a burglar alarm.
  • Keeping good repair: This is something you have to do for your tenants anyway, but a property that’s in a good state, such as well-maintained pipes, interior doors and fixtures, can help to build goodwill with an insurer.

Choosing your insurance

Getting good value on your landlord insurance is about finding a balance between cost and necessity. The bottom line is, if you really think you need a particular item on your policy, such as contents cover, don’t cut costs – it could end up being more expensive in the long run.