Property insurance for landlords and tenants is complicated, unfortunately, with policies varying enormously. Following our guidelines will help ensure that you’re covered, come what may.
The first problem concerns where the division of responsibility between the landlord and the tenant lies. Usually, the risk-taker – the person who owns the object, the person who will suffer loss if things go wrong – should take out insurance to protect themselves against that risk.
Landlords
Buildings Insurance
Landlords stand to lose if the building is damaged in any way, so they are the ones who must take out buildings insurance. This covers their property against any disasters which might occur.
Loss of Rent and Alternative Accommodation Insurance
Landlords may want to insure against loss of rent, should a disaster render their property uninhabitable, such as flooding or a fire. In this case, they will also benefit from having taken out alternative accommodation insurance. This covers the cost of providing somewhere else for their tenants to live until repairs are complete.
Rent Guarantee and Legal Expenses Insurance
Rent guarantee policies tide landlords over if tenants default on their rental payments or abscond without paying, while legal expenses insurance covers some, or all, of the legal costs landlords will incur if they need to take legal action against their tenants.
Contents Insurance
Even in unfurnished properties landlords install valuable items such as white goods, cupboards etc., so they need to take out contents insurance.
Accidental Damage
Landlords should check that accidental damage insurance is included in their buildings and contents insurance. The contents policy should cover such things as red wine being spilt on a carpet, while the buildings insurance should cover events like a foot slipping through the attic floor.
Landlord Home Emergency Cover
Crises happen: boilers breakdown and pipes burst. Emergency cover gives landlords and tenants access to a full range of qualified tradespeople who will fix urgent problems. It is particularly useful for landlords who manage their own properties.
Unoccupied Property Insurance
Standard buildings and contents policies do not cover unoccupied properties, and insurers define any property that lies empty for 30 days as unoccupied. Since rental properties often remain empty for longer than that, landlords need unoccupied property insurance.
Landlord Liability Insurance
Landlords should check whether landlord liability insurance is bundled with their other policies. It will be needed should anybody injure themselves or die on their property. Universities demand it for rentals to students, while local authorities require it to be in place for rentals to tenants who are on housing benefit.
Tenants
Tenants stand to lose if their computers or other personal items are stolen, so they should take out their own contents insurance to protect these valuables. As part of the tenancy agreement, they will also usually need to take out tenant’s liability insurance to cover them should they damage anything owned by the landlord.
Bogged down in policy small print?
Whether you don’t know where to begin, you’re wondering whether you are adequately insured, or if you need advice and support in letting out property generally, get in touch with us.
