How does Landlord insurance work?
Landlord Insurance is basically a combination of lots of different types of cover all under one umbrella to protect anyone who owns a property and rents it out. It is up to you what it includes, however the more you include, the higher the premium.
The options you can include are:
- Buildings Cover
- Loss of rent
- Legal Expenses
- Accidental/malicious damage or theft
- Cover for your contents
- Property damage due to illegal cultivation of drugs
- Eviction of squatters
- Public liability
How much is Landlord insurance?
Lenders will ask you pretty early on the process what type of tenant you will be renting your property out to, as this will impact how much to pay for your insurance.
Not every insurer will be willing to cover every type of tenant, but most will give you a wide choice of tenants categories. These include:
- Employees
- Self-employed
- Unemployed
- Students
- Those is receipt of housing benefits
- Retired
- Asylum seekers
- A mixture of the above
Unfortunately, this is where categories of tenants will be labelled, and insurers will look at some of them as higher risk than others.
For example, should you let to students, unemployed or those in receipt of housing benefit then you may pay a steeper premium purely because the insurer sees them as higher risk due to them having a low-level take-home pay- meaning they may not be able to pay their rent.
It is also worth mentioning that you must always make it clear to an insurer who you will be renting to, as failure to do so could invalidate your policy.
