How much does landlord insurance cost?

As a landlord you’ll have plenty of things to consider on a daily basis to keep your tenants happy.

So it may be the case that landlord insurance isn’t top of your to do list. It is worth considering though, as if something was to go wrong in a property you rent, you could be left with some very sizeable bills, legal fees not to mention loss of rent for a period of time.

So, what is landlord insurance and how much does it cost?

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Do I need landlord insurance?

Firstly, you might have no choice. If you’re considering taking a mortgage on a property you’d like to let or are letting, it is likely to be a condition of the mortgage that you have buildings insurance in place.

However, as a landlord you may face risks, which buildings insurance does not cover. That’s where other elements of the landlord policy come in.

Imagine for a moment, that you have a flood in the property. It could:

  • Ruin your tenant’s belongings
  • Damage your plumbing
  • Make a tenant ill
  • Unsettle foundations of the building, which in turn results in the tenant needing to find a new place to live
  • Leave the property in a need of redecoration or even rebuilt
  • Leave you without income during possible demolition, debris clearance, planning and then (finally) rebuilding

To protect you against these issues, landlord insurance combines a number of different types of cover.

Buildings insurance: it covers repairing the damage to the exterior and structure of your property caused by natural events, such as the flood in our example above, through to rebuild. You will need to determine what level of cover you take, so be careful not to underinsure your property. You insure your buildings for the full cost of rebuild of the property, not the market value of the property. If you underinsure your property, you leave yourself vulnerable not only to possibly being unable to rebuild it in full and to a liveable standard but also to a loss of rental income while your property is uninhabitable

Property Owners Liability insurance: it compensates for injury, damage or loss to a third party and their property that happened on your premises. As a landlord, you are fully responsible to ensure your property is adequately maintained at all times. If a rain pipe becomes loose, falls of and hits a passerby (doesn’t need to be your tenant in particular), you could be sued for negligence and held liable. Property Owners Liability insurance will help cover the cost of legal bills as well as compensation for damages you may need to pay.

Contents insurance: this becomes especially important if you rent a furnished property as all furnishings and fittings are your assets as well. It’s likely your landlord policy offers a standard amount for contents insurance, so it’s important you check if it meets your requirements or if you need to increase the level of cover. At the same time, any belongings that your tenants own are not your responsibility to insure. They may wish to take out their own contents insurance to protect their possessions.

Loss of rent insurance: it will help protect you from losing income from your property due to an insured event, like fire, which caused damage to your property and made it unlivable for your tenants. This insurance will continue to help until the property is inhabitable again.

It’s worth noting that loss of rent insurance is different to rent guarantees, which are sometimes offered by letting agencies to cover you if your tenant doesn't pay. They are not part of your landlord insurance package.

Remember each type of cover comes with excesses, policy limits and various terms and conditions. Not all policies are the same, so make sure you read the policy information to ensure that you have sufficient cover. 

How Much Does Landlord Insurance Cost?

Obviously the exact cost of landlord insurance will depend on a host of different factors – how many properties you have, what their main use is (residential or commercial or mix), their location, types of buildings, the number of tenants, the level of cover you need for each one of them. All of these things will go towards determining the overall cost of your policy.

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Compare the cost of landlord insurance

There is an easy way of course to find out exactly how much landlord insurance will cost, and that is to compare actual quotes.

That’s where we come in. We’ll do all that hard work for you. All you have to do is use our landlord insurance comparison service and tell us your details and we’ll show you the policies and premiums that are available to you.

Try it today, find out the cost of landlord insurance with comparethemarket.com.

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