It is important to compare landlord insurance from many different providers because prices and coverage vary significantly in the marketplace. But where can you compare landlord insurance, what should you look for and which policies are the best?
To start with, consider the many options for comparing landlord insurance, from direct insurers to brokers to comparison sites. A landlord can get quotes from many sources to compare before deciding.
Household names such as AXA, Direct Line, and Admiral are highly regarded as direct providers. And sites providing a comparison for landlord insurance UK such as NimbleFins can be useful for comparing quotes as well. Plus there are also many smaller specialists that provide excellent services such as the Alan Boswell Group, Home and Legacy, and Property Protector.
When comparing, be sure to consider the premium, the excess, and what coverages are offered. Many providers offer a number of extra perks as standard, as well as building insurance and public liability which should always be included. But sometimes a landlord must pay an additional premium to get extra features like accidental damage.
Direct Line, for example, also includes boiler cover and alternative accommodation cover. Liverpool Victoria offers a 12-month guarantee on repairs if a landlord uses its recommended repairer service, while AXA includes subsidence and landslip cover with every policy.
Which landlord insurance is the best?
The best landlord insurance depends highly on a property owner’s needs, the premium they are want to pay, and the risks they are willing to take. One landlord might want a bare-bones policy while another wants a more comprehensive set of coverages. There is no one “best” landlord insurance for everyone.
For example, a property owner renting to people they know and trust, who have steady jobs and are leasing the home unfurnished, may feel they need less cover than a landlord who lets to students in a furnished house.
If a landlord feels they are most at risk of damage to contents it is worth looking at which provider offers the highest protection. Or if a landlord’s biggest fear is a tenant not paying their rent, it is best to consider an insurance provider with a comprehensive rent guarantee add-on, perhaps that covers rent for up to 12 months, rather than six.
A landlord should consider the likelihood of an incident causing financial impact and whether they are in a position to meet those costs. This will help them choose the best cover for their needs.
What to look for in landlord insurance
A landlord should always look to see if their landlord insurance includes building and public liability cover. These are the two fundamental elements of landlord insurance in the UK and if they are not included a landlord should consider how reputable the provider is.
There are specialist policies for leasehold landlords who would usually see their building insurance covered by the freeholder. These policies are largely based on contents, but also can include the extra add-ons available to landlords of freehold properties, such as accidental damage.
The amount of insurance cover a landlord should buy is based on their assessment of the risk of an incident happening against the cost of the premium. A landlord should also weigh up their ability to meet the cost of an incident if they didn’t have insurance to claim against. Can they meet the cost of a mortgage if a tenant defaults on their rent? Can they replace the contents if a fire destroyed the entire property tomorrow? These are the sorts of questions a landlord must ask themselves when deciding what extras would give them peace of mind.
Building insurance covers the cost of repairing or replacing structural elements of the property, as well as things attached to it. An insurer will meet these costs if the damage was done due to a weather issue, water or oil leak, fire, earthquake, explosion, impact (e.g., something crashing into the property), or criminal damage.
Public liability provides legal assistance and compensation costs should a tenant or other third parties become injured or have contents damaged due to a problem at the property that the landlord is responsible for. For example, a pipe bursting and damaging a tenant’s electricals, or destroying a neighbour’s ceiling.
Add-ons for a landlord to consider include contents insurance if they have expensive items in the property, and accidental damage if they are concerned about damage to contents or the building.
A landlord may also wish to purchase rent guarantee insurance if they fear a tenant may default on their rent payments. The threat to the landlord is high if they rely on the rent to pay a mortgage or other expenses. The UK ban on evictions during the coronavirus pandemic has seen experts predict the number of tenant defaults is set to treble in 2021.
Having a mortgage to repay may also see a landlord take out ‘loss of rent income’ cover, which gives a property owner a financial safety net if the home cannot be rented out for some reason, for example, if there was any damage that needed lengthy repairs.
Finally, legal expenses cover is also optional for landlords. It meets the cost of solicitor fees if a landlord has to take up a dispute with a tenant, or finds themselves the target of a claim.
All insurance policies differ, both with what they offer as standard, and the amount of cover they provide. Some will meet legal costs of up to £100,000, while others could be half of that. One could offer public liability cover up to £2million, while another may pay out up to £10million. Meanwhile, some policies offer boiler protection as standard, but others may not and instead offer another perk such as subsidence cover.