Why buy Landlords Insurance?

Because you want to protect yourself against the costs you might incur if your property is damaged whilst it is let out.

If you have a mortgage on the property, it is usual for the bank to insist that the building is insured.

Note that ordinary household insurance policies will usually contain clauses which will not cover you if the property is let out, and it is necessary to have a policy specially aimed at property which is rented out.

What is covered?

Normally damage caused to your property due to fire, bad weather, flood, subsidence, or malicious damage.

Your liability to other people using your property if they are injured or have their own property damaged due to your negligence will be covered.

Your loss of rental income is covered if tenants have to be re-housed following a claim.

What is not covered?

There are normally reduced levels of cover if your property is unoccupied for an extended period of time, say 30 days.

Damage due to normal wear and tear or poor maintenance will be excluded.

If you have a claim, you will be expected to pay the first amount of the claim, known as the excess. This may be £250 or more, but if your claim is for subsidence it might be £1000.

Don't forget that the amount that you should insure for is the cost of rebuilding, rather than the resale value of your property.

What options are worth having?

You may be able to include accidental damage at a small extra charge, and there are normally options to insure the landlord's possessions, and even the tenant's possessions. Some policies have an option to include legal advice and representations in disputes with your tenants. If your policy has this option, it will be worthwhile to take it out, although you can buy this cover as a separate policy from specialist providers. Typically a legal protection policy will also provide assistance with debt recovery.