Letting property insurance may be critically important if you’re a landlord or are thinking of becoming one.

Definition of a landlord

Some people sometimes express surprise when they’re described as a landlord.

The reality is though that if you rent out a property in all or part, then by definition you’re obtaining income from your property and are therefore a landlord.

That’s an important point because it means that not only may you have certain legal obligations but also your insurance position is significantly different to that of an owner-occupier.

Letting property insurance

If you’re a conventional owner-occupier, you may have the traditional cover of home buildings and contents insurance.

Such a policy is generally not suitable for a landlord. In fact, if you change the nature of your property’s occupancy from owner-occupier to rental, then typically your existing buildings and contents cover will become invalid.

The reasons for this are quite simple – your risks have changed.

Landlord risks

As a landlord, you have all the well-known risks of fire, flood and so on, but the fact that you have tenants means that you have a variety of additional risk factors.

For example, insurance providers typically see:

• having tenants and their guests in your property may mean that you’re more at risk from third-party liability arising from accidents and injuries deemed to be attributable to your property and its maintenance;
• problems that you as an owner-occupier may notice and deal with immediately (eg. small leaks) may be ignored for longer periods by tenants thereby increasing the possibilities of major problems arising and potentially larger claims;
• your property may be empty for periods due to gaps between lets etc.

Letting property insurance (as well as vacant property insurance if your property stands empty for around 30 days or more) needs to take these things and others like them, into account.

Cover provided

This form of rental property insurance (sometimes also called buy to let insurance) may also provide cover for, in some cases, a loss of rental income where this is related to an insured risk.

As touched upon above, it’s probably worth keeping in mind that any property that stands empty for more than 30 consecutive days (eg. during redecoration) may count as an unoccupied property and may therefore require special unoccupied property cover.

Having a suitable form of letting property insurance may potentially help you avoid financial ruin – it’s therefore perhaps worth thinking about in more detail.