Top things to consider when purchasing landlord insurance

Although not a legal requirement, landlord insurance is essential for anyone who rents out property. Unsurprisingly, most buy-to-let mortgage lenders insist you take out this type of insurance. It differs from normal home insurance by allowing you to protect yourself from the specific risks associated with renting out property. So, what do you need to consider when buying landlord insurance?

What type of landlord insurance do I need?

This depends on the type of risks you want to cover yourself against.

• You will undoubtedly need to take out landlord buildings insurance to cover the actual structure of the building.
• If you rent out furnished property, then adding landlord contents insurance, including accidental and malicious damage, would make sense.
• You may also want to take out landlord home emergency coverso you can access 24/7 help for plumbing, electrical or heating malfunctions.

 Now you need to consider the risks that are landlord specific.

• Landlord liability insurance will protect you against claims for injury arising from a defect in your property. It’s important to be have this type of cover as claims for personal injury can be significant.
• You may have periods when your property is unoccupied between tenancies so unoccupied property insurance will cover you against this risk.
• Should your property become uninhabitable for any reason then loss of rent insurance protects you against the loss of income.
• Despite having done careful credit and reference checking, you might find yourself in the situation where tenants default on payments. 
• Tenant default insurance will cover you for this possibility.
• If you ultimately have to take legal action to chase unpaid rent or evict tenants, then legal expenses insurance would offer you financial protection.

Do I need different insurance for an HMO?

HMO landlord insurance is needed if you rent houses that are in multiple occupation. This type of tenancy presents a higher risk than single household occupancy, so the terms of this type of insurance are slightly different to those of normal landlord insurance policies.  However, you can cover against all the risks already mentioned associated above. You must register your property as an HMO in order to be eligible for this specialist insurance.

How much will I have to pay?

The price you pay for your insurance won’t only be determined by the type of cover you chose. Factors such as the size, location and condition of your property will play a big part in the cost of your premium, as will your claims history and whether you have added extra security measures such as cameras or alarms.  The kind of tenant you rent to also affects your premium. Groups considered to be high risk, such as students or those in receipt of housing benefits, will attract a higher premium.

As with all type of insurance, you can adjust your premium by varying the level of cover you buy and the amount of excess you pay on each claim. Calculate carefully how much cover you really need and how much excess per claim you are willing to pay.

How can I get the best deal?

Finding the right landlord insurance can be complicated.  Price comparison websites can offer a starting point but simply choosing the cheapest product may not be right for you.  Be sure you are clear about your needs, the level of cover offered and excesses that apply. Checking out customer reviews would be wise to ensure the company offers a good level of customer service.   Once your policy is in place, be sure to regularly review it to ensure it continues to meet your needs.