Common landlord mistakes and how to avoid them: #4 Not having enough insurance protection

If you have a Buy to Let mortgage, it will be a requirement that you have buildings insurance. And even landlords who own their property outright tend to insure it for the rebuild cost and have cover for damage sustained as a result of storms, fire and flood.

But there are other risks that come with tenanted properties, over and above what you’d expect with your own home. And, as a landlord, it’s important to make sure you have enough protection to cover you financially in case things go wrong. Having a good quality rental property that generates profits for you is one part of being a successful landlord, but the other part is protecting your investment so you can keep hold of those profits!

So, on top of buildings insurance, here are five key things we recommend you take out cover for:

1. Contents

This is especially important if the property is fully furnished, but even if it isn’t, you’re likely to have installed carpets, curtains, light fixtures and white goods. the cost of replacing everything could run to many thousands of pounds.

2. Malicious damage

If a tenant causes damage – either accidentally or deliberately – and you can prove it, you should be able to retain the cost of repairs from their deposit. However, in case the cost of the damage exceeds the deposit held or the tenant disappears and you can’t pursue them for the money, it’s insurance that will cover the repair bill and can be really helpful.

Be aware that some landlord policies will only cover you for accidental damage, so make sure yours includes malicious damage and theft by tenants or their guests.

You can also ensure you’re covered for the substantial damage that could be done if your property was inadvertently let to criminals and converted to a cannabis farm – which happens more frequently than you might think!

3. Public liability

If a tenant, contractor or visitor injures themselves in your property and believes you were at fault, they may decide to pursue you for compensation. This insurance should cover both your legal costs and any compensation awarded.

4. Alternative accommodation costs

If the property is so badly damaged that your tenants need to be re-homed while remedial works are carried out, you might incur extra costs in securing alternative accommodation for them. This insurance will ensure you aren’t left out of pocket.

5. Rent protection and Legal Expenses

If you haven’t taken out rent protection and legal expenses insurance before, we’d recommend it’s well worth investigating, particularly given the current cost-of-living crisis, where many people are struggling to meet their monthly commitments. For a relatively small monthly cost, you can have peace of mind that if your tenant defaults, your rental income is protected and the cost of evicting your non-paying tenant is covered.

Our partner First2Protect's policy, which is underwritten by Aviva, covers landlords who have chosen the Your Move Fully Managed or Rent Collection lettings service for:

Rent Protection

• 100% of your monthly rent if your tenant defaults, for up to 15 months (subject to a maximum of £50,000)

Legal Expenses

• Up to £50,000 legal expenses to pay for regaining possession of your property

Alternative Accommodation

• Up to £100 a day paid for up to 30 days if you and your family wish to move into the property

Automated Claims

• If your rent becomes overdue your claim will be automatically processed and credited to your account, so there is no paperwork for you to complete

To discuss this policy or if you have any insurance related questions our partner First2Protect Insurance Services are here to help. Request a call back to discuss your options.

For landlords who have chosen the Your Move Tenant Find Lettings Service First2Protect Insurance Services offer this optional cover exclusively from their provider ARC Legal Assistance:

Rent Protection

• Up to £1,250 monthly rent for up to 6 months of the contract if your tenant defaults

Legal Expenses

• Legal expenses paid for costs arising from regaining possession of your property from a tenant

Squatters

• Funds paid to evict squatters who have gained unlawful access to your property

Rent paid while you restore your property

• If there is damage to the property which must be repaired before the property can be re-let, then 50% of the rent will be paid for up to three months

To discuss this policy or if you have any insurance related questions our partner First2Protect Insurance Services are here to help. Request a call back to discuss your options.

Find out more about:

Landlord insurance

Rent Protection Insurance