What Does A Landlord Insurance Policy Cover?

Like so many commercial covers, landlord insurance isn't a one-size fits all policy. It's something that needs to be tailored to your properties and the tenants you are providing homes for. There are, however, some core elements that you should look for in a policy, such as:

• Landlord liability - If a tenant or visiting member of the public suffers injury or damage to their possessions as a result of a fault with your property, you could be held liable in law. A successful compensation claim in these circumstances could be crippling, so make sure your landlord policy gives you adequate protection
• Loss of rent – being a landlord is like running any other business and its aim is to make money, in this case by charging rent. But what if you were unable to collect that rent owing to the property becoming uninhabitable following a flood or fire? With loss of rent cover, you will be able to claim all or a portion of lost rent in these circumstances, and you can even claim for the cost of providing alternative accommodation for tenants
  Please note: this cover will not reimburse you should your clients simply fail to pay the rent. For that, see the tenant default section below
• Tenant default – rent is the lifeblood of your business, but what if tenants can't or won't pay you? The mortgage and other bills will still keep coming in and you could quickly find yourself experiencing financial difficulties. If you have tenant default cover as part of your policy then you'll be covered for up to eight months' lost rent if tenants fail to pay for two consecutive months. Take out a tenant default option and you'll usually get landlord legal expenses cover as well, which covers property-related legal fees up to £50,000, including legal action to repossess the property or pursue unpaid rent
• Buildings insurance – this will form the basis of most landlord policies and provides protection should the property be accidentally damaged by common risks such as fire or flood. Most mortgage lenders will insist that you take out buildings insurance, unless you own the property on a leasehold basis, in which case your lease owner or management company may already have a policy. You also need to make sure that your building is covered for rebuild costs. These are not the same as the market valuation and you should get a professional assessment of these costs before taking out a buildings insurance policy
• Alternative accommodation – accidents happen, disaster strikes. Suppose you're unlucky enough to have a fire and your rental property is temporarily rendered uninhabitable, what then? Your tenants still need somewhere to live and if you're contractually obliged to provide alternative accommodation in the event that the property becomes uninhabitable, then you could be facing a hefty bill. If you have alternative accommodation cover as part of your wider landlord policy, then the cost of providing somewhere else for them to stay will be covered
• Contents insurance – this gives you financial protection for your possessions within your properties should they be damaged or destroyed. Landlord's contents insurance makes particular sense if your property is being let on a partially or fully-furnished basis.
  Please note: this will not include your tenants' possessions; they will need to take out their own contents policy for that
• Unoccupied property insurance – despite your best efforts, there may be times when your property is left unoccupied. It may be that you are between tenants or that its undergoing modernisation or renovation. Many standard landlord policies will not cover you if the building is left unoccupied so taking out unoccupied property insurance cover can make a lot of sense. If your property is undergoing renovation you may also need to consider renovation insurance, this policy can be taken out either for a short-term renovation or long-term, so if something goes wrong you know you are covered