Landlord Insurance Matters

It has been reported that one in eight landlords does not have landlord insurance! Whilst most landlords will of course have regular buildings insurance, covering subsidence, storm damage, flooding etc, some policies do not take account of a property being let. In fact, some insurance can be invalid if the insurer has either not been informed that the property has a tenant, or if the insurance specifically excludes tenancies.

The average landlord spends over £3,000 a year on property maintenance, much of which could be categorised as damage, not maintenance. This could have been recouped through landlord insurance. Carpet stains and burns, wall and door damage, leak damage to walls/ceilings and extreme cleaning/refuse removal can usually be regarded as claimable under specialist landlord insurance.

While not a legal expectation, any landlord with a buy-to-let mortgage will be required to take out landlord insurance either alongside or as part of their buildings insurance. Landlords should look carefully at whether internal damage counts as “buildings”, “contents” or “accidental damage” and the right insurance should be in place to cover every eventuality.

But the cost of repairs might only be the start of much heftier costs. Landlords still have an obligation to provide alternative housing in the event of their property becoming uninhabitable following a flood or storm and possible associated loss of rent. There is also the issue of third-party liability in the event of a tenant injury as a result of some property defect. These figures can quickly add up to tens of thousands of pounds, all of which should be covered by appropriate landlord insurance.

We’re in the business of helping our landlord clients sleep at night. We do this through a passion for effective tenant sourcing, referencing and relationships. But should the unexpected happen – that’s when correct landlord insurance takes over and we strongly recommend that landlords don’t scrimp on this relatively minor cost.