Do I need landlord insurance if I have home insurance?
What’s the difference between home insurance and landlord insurance?
In simple terms, home insurance is a great option for private individual property owners to protect their home from accidental or malicious damage while they live there. However, if you have let out your property to tenants and you do not live there yourself, the home insurance may fall short of offering you adequate protection. This is where landlord insurance steps in.
Landlord insurance compared to home insurance
Many property owners right across the UK will have home insurance in place to protect them in the event of issues such as leaking pipes, boiler breakdowns, smashed windows and accidental damage to the home’s fixtures and fittings.
However, if you don’t live in the property you own and you lease the building out to tenants, then home insurance may not protect you as much as you might imagine. So, here we explore the key differences between home and landlord insurance policies so you can know exactly what you need to enjoy peace of mind as a property owner.
What is included in home insurance?
Buildings and contents cover
Many home insurance policies will include buildings and fixtures and fittings cover, meaning that you can claim for accidental or malicious damage to:
- the building’s structure
- standard fittings inside the home
A home insurance policy will cover the costs of repair work to your property in the event of:
- External vandalism
- A break in
However, if you are not the person living in the property you own and a tenant is ‘in situ’, then home insurance policies will often not cover the cost of wilful damage by the tenant.
What’s included in landlord insurance?
As mentioned above, home insurance policies come with certain limitations that mean that, while they are adequate for home owners living in their property, they cannot cover many circumstances involving tenants. Landlord insurance will include buildings and fixtures and fittings cover, just like home insurance, along with additional covers that are specific to landlords.
Property owners liability
This is one of the major areas where home insurance does not provide cover. Property owners liability cover (included as standard in Superscript’s landlord insurance) covers your liability to pay compensation and legal costs in relation to bodily injury to either a tenant or member of the public in your property.
While your home insurance may include an element of public liability cover, it will not include coverage for injuries to your tenants. Without property owners liability cover, you as a landlord could be liable to pay significant sums of money if a tenant, for example, makes a claim after receiving an electrical shock from unsafe wiring in your home.
Most home insurance policies will not cover the cost of damage or theft of the property owner’s contents in a home with a tenant in residence. You may own, for example, the sofas and chairs in a furnished property. If you lived there, your home insurance would cover accidental damage to these items, but only landlord insurance will cover the repair or replacement cost in the event that these items are damaged accidentally or maliciously by a tenant.
Unsurprisingly, home insurance will not cover the loss of rental income you would have received in the event that your property becomes damaged and uninhabitable for a period of time. Landlord insurance can reimburse you the rental income lost as a result of not being able to house a tenant after an event such as a fire or a flood.
Do I need landlord insurance?
While neither home insurance nor landlord insurance are legally required for homeowners in the UK, having a good level of protection is a sensible step to avoid unexpected costs in the event of damage to your property.
If you buy a property with the intention of letting it out rather than living there as your main residence (known as buy-to-let), then your mortgage provider might stipulate that you have to take out landlord insurance throughout the life of your mortgage as a condition of the agreement. In this instance, home insurance would not be sufficient, even if it did include buildings and contents cover.
So, if you own a residential property for the rental market, landlord insurance provides more comprehensive cover than home insurance, especially as when it comes to property owners liability cover, and the fact that some providers of home insurance will not cover damage costs when a property is let out to tenants.
What's included in Superscript's landlord insurance?
A Superscript landlord insurance policy for a residential property owner would include, as standard:
- Buildings cover
- Fixtures and fittings cover
- Property owners' liability
You can then also choose to add more covers to your policy, offering more tailored protection, including:
- Landlords contents cover
- Rental income protection
- Terrorism cover
- Employers liability cover (for example, if you employ a janitor or admin assistant for your properties)
Finally, if you are the owner of commercial units that you wish to let out to businesses, then you may wish to consider Superscript's comprehensive commercial landlord insurance.
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