About landlords insurance
Landlords building insurance
How much does landlords insurance cost?
The cost of landlords building insurance varies according to the let property location, property type, insurance rebuilding sum insured and the type of tenancy. Property location is key, if your let property is in a high crime area then the landlords insurance will be increased due to the extra risk. The type of tenants occupying your let property also form part of the insurance premium calculation. Private paying tenants typically attract the lowest landlord insurance rates with DSS and asylum seekers the highest.
How much buildings insurance do I need?
The amount of building insurance is related to the rebuild cost and not the actual market value of the let property, this is the same for all houses. The building insurance sum insured needs to include all costs for rebuilding the property in the event of a total loss. This would include; rebuild cost, surveyors, legal fees and site clearance. When the property is surveyed by a mortgage lender they will normally indicate the buildings sum insured required and this should be index-linked each year to account for rises prices.
Why do I need landlords building insurance?
You could ask the same question regarding your own home. Your let property is an important and expensive asset which generates revenue and capital value. Without buildings insurance, should you suffer a total loss such as a fire then property becomes almost worthless. If the property has a buy to let mortgage then the lender will insist that appropriate landlords building insurance is in place at all times. Landlord building insurance is far from expensive and can also be included in your property expenses to offset against tax.
Landlords contents insurance
Landlords contents insurance is only required if you let the property furnished. So if you include carpets, furniture, sofas, beds etc then you should insure these with contents insurance against fire, flood and theft. You may also be able to include accidental damage.
If the property is let unfurnished or the tenants bring their own furniture and goods then it is their responsibility to arrange adequate contents insurance. As with all insurance, the premium is related to the amount of cover or sum insured required. It is also a false economy to deliberately underinsure to get a lower premium as the insurance company will pro-rata the payment in the event of a claim.
