Find out how landlord insurance works and which companies have the best plans and customer service based on their policies.
Exactly what is landlords insurance?
In some ways, landlord insurance resembles homeowner insurance, but it’s tailored to protect rental homes.
Buildings, contents, and liability insurance are the three most common types of landlord insurance.
Depending on the type of home you’re renting, you may also want to consider various add-ons.
On a property-by-property basis, you’ll often get insurance. Landlords who own four or more rented properties and want to insure them all at once are eligible for portfolio policies.
Landlord insurance policies come in a variety of forms.
Insurance for buildings
All structural damage and reconstruction costs are covered by building insurance, which protects your home in the event of a natural disaster.
Many mortgage lenders will want confirmation of buildings insurance before they’ll consider your application, and they’ll usually define the minimum level of protection they expect you to have in your contract before you can move forward with the application.
You’ll pay for building insurance as part of your service charge if you live in a unit in a building with a shared building policy.
When it comes to building insurance, you can expect coverage for the following perils:
Theft, vandalism, and deliberate destruction are all forms of theft.
Damage caused by lightning, a storm, or an earthquake (may be limited to the building itself rather than fences etc)
a blazing inferno or a billowing
Accidental spills of oil or water
A fire or water leak that starts in one apartment may not be covered by the building’s insurance. For this reason, it’s critical to thoroughly review the policy’s coverage and consider purchasing a separate landlord policy to fill any gaps in coverage.
Insurance for your belongings
Insurance policies for contents can be purchased on their own or in conjunction with building insurance. If you’re renting out a furnished or unfurnished property, you’ll need a different level of contents insurance.
For example, if a flood damages your carpets, furniture, or electrical appliances, a contents insurance policy will cover the cost of repairs or replacements. Some plans can also cover accidental damage.
Insuring the contents of a rental property with a landlord’s insurance only covers goods you’ve furnished. Your tenants’ personal property, such as clothing, furniture, and other possessions, will not be protected under your insurance, so encourage them to get their own coverage as well.
If your tenant or a guest is injured on your property, you are protected by liability insurance.
However, just because you’re covered by a public liability policy doesn’t mean you can put off improving the safety of your rental property for your tenants.
A million-pound liability insurance policy may be important if you’re proved legally responsible for an accident and have to pay compensation to the victim.
Indemnity for renters’ guaranty
Tenant default insurance (also known as rent receivable insurance) covers you in the event that your tenant defaults on their rent obligations, and it may also cover you during any void periods during which the property is vacant.
Rent guarantee insurance frequently includes legal expenses protection, which covers the costs of repossession and eviction proceedings if they are necessitated by late rent payments.
Check your contract with your managing agent (if applicable) before purchasing this insurance, since you may already be covered by your landlord’s insurance policy.
Emergency coverage for your home
In the event of an emergency, your home’s vital services are covered around the clock.
Coverage for repairs should allow you to get services functioning as promptly as possible.
A standard form of emergency protection for your house is the following:
Heating and plumbing issues (If you want boiler protection, you’ll probably have to shell out more money.)
Problems with the roof
Problems with windows and doors
Problems with pipes, drains, and sewers
Problems with the power grid
We’ve misplaced our keys.
In the past, research has revealed that home emergency coverage isn’t always worth the money because of the number of exclusions contained in many plans, so make sure you read the fine print before signing up for any plan.
Providers of the best insurance for landlords
Our research has gathered data from over 500 landlords and analysed the plans offered by major insurers such as Aviva, Axa and Direct Line to help you find the best landlord insurance policy.
The results are summarised in the tables below, together with the overall policy scores and the Which? customer scores.
Insurance policies for landlords:
A total of 99 distinct characteristics of landlord insurance plans were evaluated in July and August 2021 in order to derive the following policy scores, which include coverage for things like subsidence and malicious damage.
|Provider name||Total policy score||Buildings||Contents||Liability||Rent that can be collected||Other factors*|
ABG or the Alan Boswell Group (policy underwritten by Aviva)
|NFU Mutual||79%||84%||84%||84%||Not offered||76%|
ABG or the Alan Boswell Group (policy underwritten by NIG)
|ABG or the Alan Boswell Group (policy underwritten by SAGIC)||71%||75%||75%||68%||54%||53%|
Alan Boswell Group\s(policy underwritten by Covea) (policy underwritten by Covea)
It’s unclear why we looked at so many Alan Boswell policies.
Customers of the Alan Boswell Group, a group of independent insurance brokers, have purchased the policies from Alan Boswell.
Which third-party company is responsible for providing insurance coverage varies from policy to policy (shown in brackets in the table above).
Customers can select which of the third parties will underwrite their coverage when they purchase it.
Customer feedback on landlord insurance
We conducted a poll of 496 landlords to determine our customer satisfaction results.
Customer satisfaction is important to us.
|Assistance to customers||The process of applying for a job||Policy that is easy to understand||Return on investment|
|NFU Mutual (40)||73%|
|Direct Line (102)||68%|
|Simply Business (46)||64%||–|
Exactly how much does it cost to insure a landlord?
If you have a claim history or own an older home, these are all things that go into determining how much landlord insurance you’ll have to pay.
Some other things to keep in mind are:
what kind of property you’re looking for
There are a total of
Property redevelopment costs
the extent to which you’re protecting yourself
The degree to which you want to go overboard
If you are a member of an accreditation programme for landlords, you may be eligible for a discount from your insurance provider.
For your convenience, Confused.com, a partner of ours, provides price comparisons from more than 50 insurance companies.
Request a price estimate right away.
How to locate insurance for rental property owners
Landlord insurance can be purchased in a variety of ways, including:
Websites that compare prices
On the internet or by phone with insurance firms.
By use of an insurance agent
Using the services of a financial advisor
Always search around and compare quotes before making a decision, and if you’re hesitant, seek independent advice before making a decision.
Claiming for damages on your landlord’s policy is a complicated process.
A claim should be made by contacting your insurance company directly.
In order to avoid a rejection of the claim, it is imperative to act quickly.
As soon as you’ve submitted a claim, you’ll need to offer proof of what happened, when, and how.
Your insurer will appreciate any supporting documentation you can supply, so don’t forget to include any relevant photo documentation as well as repair estimates and invoices.
According to the terms of your policy, your insurer’s investigation and response time may differ.
Insurance policy for landlords: the most important terms
A lack of familiarity with insurance jargon might lead to perplexity when reading policy documentation.
We’ve broken down some of the important terms and phrases you’ll come across when looking for insurance.
Insurers refer to the things they protect against as “hazards.” If you’re looking for an insurance policy, the hazards list should be one of the first items you look at.
When it comes to property insurance, insurers often allow you to tack on different types of coverage (for an additional fee), and some will even let you design your own custom policy.
Amount of the insurance policy
When an insurance company pays out a claim, it is known as the’sum insured.’
It is generally recommended that the sum insured should be equal to the cost of rebuilding your home.
Be wary of insurance policies that promise to pay out large sums, as there is no value in having $1 million in coverage if the total cost of repairing the property is far lower.
For the covered amount, insurers typically use a “automatic reimbursement” approach. So, if you file a claim, your maximum coverage amount will likely be same, but your premium may increase when you renew.
Your home’s resale value may be less than its market value if the cost to rebuild it is less than the raw material and labour costs.
House surveys or online calculators like the one supplied by the Association of British Insurers can be used to estimate the cost of rebuilding a home in the event of a disaster.
When you file a claim on an insurance policy, you’ll almost always have to pay a portion of the bill yourself. The excess is the term for this.
Choosing the proper amount of excess is a delicate balancing act because it has a significant impact on the overall cost of the policy.
As an example, a normal insurance policy may levy an excess of £500 for plumbing claims or £1,000 for subsidence claims. You may be able to get this reduced, but you’ll have to fork up more money up front.
A month’s worth of rent is typically included in the coverage of a rent guarantee insurance policy.
There will always be a list of exclusions in an insurance policy. They’re known as exclusions.
Before making a decision on an insurance, be sure to read the exclusions section carefully.