Before I start driving through the details of Landlord Building Insurance, I want to very quickly explain its overall place in the world of landlord insurance.
Landlord Building & Content Insurance is a type of landlord insurance, along with Landlord Rent Guarantee Insurance (RGI), landlord legal expense insurance and so on. There are several types and naturally, each type of insurance serves its own purpose.
A landlord, can in theory, take out all the available types of insurances, which will essentially cover different scenarios/situations. For example, a landlord Rent Guarantee Insurance (RGI) policy will cover landlords for any loss in rent (e.g. if a tenant falls into arrears), while landlord content insurance will cover items inside the property (e.g. protection against theft). They’re both types of landlord insurances, but they’re protecting landlords against two very different situations.
Please go to the landlord insurance blog post for an overview of the types of insurances available for landlords.
Get quick and easy Landlord Building Insurance quotes
If you haven’t got a policy in place, or you’re looking to renew your existing landlord building insurance policy, I would highly recommend talking to a specialised Insurance broker, so you get access to free professional advice and the best products on the market at the most competitive rates. There is no obligation and receiving the quotes is 100% free.
If you click on the ‘quote’ button below, you will be directed to a landlord insurance form, where you can compare some of the best quotes around by talking to a specialised broker! I recently renewed my landlord Insurance policy by using the quote form and saved £260, and it only took 20 minutes to get everything up and running.
What is Landlord Building Insurance?
It’s a policy which covers your property from any damage, which may include fire, vandalism or malicious damage, natural disasters, and subsidence etc.
There are literally hundreds of policies available on the market, and new ones are being introduced every day, so it’s important to use due diligence when choosing the best policy to suit your needs. An insurance broker should be able to provide assistance and guide you in the right direction. You can talk to a broker today, by filling in this form (there is no obligation and it’s completely free)!
Why is building insurance so important?
This is a kind of a no-brainer. Or at least I hope it is.
Buy-to-let properties are large investments, probably your single largest investment (besides from your own residential home), so you need to protect your money in the event of unforeseen disaster. Believe me when I say disaster often strikes in this industry; the world of landlord is fickle and unpredictable at best.
The maths for “why” is simple: pay approximately £150 a year for insurance, or stand to lose your entire investment by an accidental fire. Not to mention, you’ll still be liable to pay the mortgage- imagine how demoralising that would be, paying off debt for a pile of rubble?
Do I legally need building insurance to let out my property?
No – building insurance is currently not a legal requirement for landlords in England & Wales, but for the reasons mentioned above, it’s not worth going without.
Is there a difference between “Home Insurance” and “Landlord Insurance”?
Yes, there is a difference, and it’s crucial to get “Landlord Building Insurance” if you’re letting your property.
Landlord insurance can be slightly more costly than regular home insurance, so a lot of landlords opt for “home insurance”, assuming they’ll still be covered but at a lower rate. It’s a common mistake that can cost thousands and thousands of pounds.
In most cases, “Home Insurance” polices will NOT cover any claims made in a buy-to-let property. In fact, the insurance policy will most likely be invalid.
Needless to say, Home Insurance covers residential properties, while Landlord Insurance covers buy-to-let properties.
Do I need contents insurance?
Landlord building insurance is considered essential, but content cover is more optional, and it depends on the type of property you are renting.
If your property is “furnished” then it’s definitely worth getting content insurance. Additionally, if white goods (cooker, oven, fridge, freezer..etc) are provided by the landlord, then it also maybe worth getting content insurance. However, the decision is down to the landlord’s discretion.
If the property is unfurnished, then it’s ultimately down to the tenant to get his/her own policy to insure their personal belongings.
Why do I pay more/less for Landlord Insurance policy than other people?
You’ve been gossiping amongst fellow landlords and the contrasting rates have confused you, right?
Insurance premiums are generally based on the risk and crime levels in different areas. Usually insurance companies use postcodes to cross reference police records and their own insurance claims history for the area to assess the risk. So your landlord insurance premium will be based on the stats- it’s nothing personal, and you’re not necessarily getting ripped off. Although, there’s a lot to be said for shopping around to get the best quotes.
Most insurers won’t cover properties that are empty for 30+ days
A lot of insurers do impose this rule because a vacant/empty property is vulnerable. However, some insurers are more lenient than others, and you can find ones that allow for either 60 or 90 day vacancy periods.
The best thing to do is get a free Landlord Insurance Quote and then ask the insurers what their policy is on the matter.
From my experience, most BTL’s aren’t vacant for 30 days or more unless there is considerable refurbishment being undertaken. In those cases, it is crucial to contact the insurer and inform them of the situation, that the property will be vacant for 30+ days.
This won’t apply to most landlords, but it should be taken seriously by landlords that have properties in areas that are prone to flooding.
Consider whether you need your building cover to protect your against flooding damage, or if it would be a sensible safety precaution… just in case (i.e. you may have had a few close calls in the past)! But be warned, not all insurers cover flood damage, and there is usually an extra premium to include it.
For more details on how landlord flood insurance works and what to do in the unfortunate event, please go to the Landlord Flood Insurance & Flood Damage post.
Keeping records up to date with your insurer
This is crucial.
Insurers are notorious for finding ways to withhold from paying out when a claim is filed. If they can find a reason not to pay out, they will, so it’s in your best interest not to give them one.
If there’s ever a change in circumstance, inform your insurer immediately so they can update your policy. Changes include:
- New tenants
- A tenant moves out e.g. divorce/separation
- If the property is going to remain empty/vacant
If you don’t update your policy by informing your insurer, or at least enquiry whether you need to or not, you may find yourself with an invalid policy.