Residential Landlords Insurance

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The financial rewards of letting your home or a flat can, at first sight, appear to be outweighed by all the regulations you need to comply with and by the various risks involved.

However, this is not necessarily the case: a good knowledge of what you are doing, good management and a good insurance package will take care of most eventualities.

There is no law which says you must carry insurance as a landlord, or as a tenant, but you'd both be very foolish not to. If you have a mortgage your lender will almost certainly insist that the property is properly insured. 

Policies are now available to cover almost every conceivable eventuality, from a slate falling off your roof and injuring a passer by, to tenants damaging your property, or you having to re-house tenants following a fire or flood.

It is important to realise that normal household insurance policies are not suitable for letting. You need a policy which is specifically designed for letting and one which covers several additional risks.

If you are letting your property your mortgage company will want to know about it and will insist on certain conditions, such as appropriate lettings policies. 

Don't forget, it's easy to obtain insurance cover by not disclosing all the material facts (such as the fact that you are letting the property) but, in effect, you are not insured. If anything happens the insurance company will investigate and will almost certainly refuse to pay out.

Landlord's policies for residential letting are now very competitive and there is little difference in cost from normal household policies. Many packages are available ready made and off the shelf from very reputable high profile insurance companies and can be purchased quickly and conveniently on the Internet.

As more and more people let properties, policies have developed to cater for the landlord's needs and cover can often be extended just as required, for example:

• Building and landlord's contents
• Public and occupier liabilities
• Loss of rental and the cost of re-housing your tenant in the case of a fire or a flood
• Cost of hotel accommodation if your tenant refuses to leave on time
• Loss of rent if the tenant does not pay 
• The cost of evicting a bad tenant
• Malicious damage and vandalism by tenants and others
• Emergency repair services
• General legal costs etc

Admittedly some tenant groups are more difficult to insure, though some companies will offer packages for these groups still at competitive rates:

• Students
• Tenants who are not working

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