Renting out a property comes with a lot of responsibility, and one of the most important things landlords should think about before taking on tenants is insurance.
Many landlords assume that standard home insurance will cover a rental property. However, this often isn’t the case. Rental properties come with different risks, from tenant damage and unpaid rent to legal disputes and emergency repairs, which is why having the correct protection in place is essential.
If you’re new to renting out your property or are looking to better understand what cover you should have in place, this blog explains what landlord insurance is, whether you need landlord insurance, what landlord insurance covers and what it won’t cover.
What is landlord insurance?
First things first, what is landlord insurance? It’s a specialist type of insurance policy specifically designed to protect property owners who rent out their homes to tenants.
Landlord insurance helps cover some of the unique risks that can arise from letting out a property, such as tenant damage, loss of rental income and legal disputes.
It’s also important to note that standard home insurance, which you would normally have in place for a property you live in yourself, usually becomes invalid once the property is rented out. As highlighted by NatWest, landlord insurance is not legally mandatory. However, it can provide valuable protection for anyone renting out property.
For more landlord advice, the Rosevale landlord FAQs cover a range of useful topics around property management and landlord responsibilities.
Do I need landlord insurance?
Landlord insurance is not currently a legal requirement in Scotland, but it is strongly recommended for anyone renting out a property. At Rosevale, we offer Landlord Insurance via Goodlord as part of our Vouch Referencing process. This provides landlords with additional protection, including cover for non-payment of rent. As highlighted by CIA Landlords, while landlord insurance may not be compulsory by law, it can provide important financial protection for landlords against a range of risks associated with rental properties.
If you have a buy-to-let mortgage, which you should have as a registered landlord, your lender will also often require suitable insurance to be in place as part of the mortgage agreement. Standard home insurance policies are unlikely to provide adequate cover once a property becomes tenanted.
In Scotland, landlords also have a legal responsibility to ensure their property is safe and properly maintained for tenants. As outlined by mygov.scot landlords must meet certain obligations under the Repairing Standard and landlord registration requirements.
What does landlord insurance cover?
As highlighted by Bank of Scotland, landlord insurance is designed to help protect landlords against the risks that can come with renting out a property.
While the exact level of cover will depend on the policy you choose, landlord insurance is there to provide financial protection if unexpected issues arise during a tenancy. From damage to the property to legal disputes or loss of rental income, having the right cover in place can help give landlords valuable peace of mind.
Most landlord insurance policies will typically cover:
- Damage to the property caused by fire, flooding or storms
- Landlord-owned furniture and furnishings
- Loss of rental income
- Legal expenses
- Liability claims from tenants or visitors
- Tenant damage in some circumstances
Alongside protecting against unexpected costs, landlord insurance can help support landlords in meeting their responsibilities and managing a rental property with greater confidence.
What does landlord insurance not cover?
While landlord insurance can be a great safety net, it’s worth remembering that it won’t cover every situation.
For example, most landlord insurance policies won’t cover general wear and tear. Things like worn carpets, ageing appliances and faded paintwork are usually considered part of the normal maintenance costs that come with renting out a property. As highlighted by AXA, damage caused through everyday use and deterioration, as well as tenants’ personal belongings, usually wouldn’t be covered through insurance.
Landlord insurance cover varies between providers, so it’s always worth checking exactly what your policy includes before renting out your property. If you need any guidance, our experienced property managers at Rosevale are always happy to answer any questions and point you in the right direction.
How much does landlord insurance cost?
There’s no set cost for landlord insurance, as it will depend on factors such as the property’s location, value, and the level of landlord insurance cover you choose. Optional extras, such as landlord insurance, rent guarantee cover, can also increase the overall landlord insurance cost.
According to Hiscox, prices can vary considerably depending on the type of property and the protection required.
While it can be tempting to focus solely on price, it’s important to choose landlord insurance that provides the right level of protection for both your property and rental income. If you’re unsure where to start, the team at Rosevale work with a number of trusted landlord insurance providers and would be happy to point you in the right direction.
Conclusion
Being a landlord comes with plenty of responsibilities, but making sure you have the right insurance in place doesn’t need to be complicated.
With the right cover and support behind you, you can focus on getting the most from your investment while having peace of mind that you’re protected if things don’t quite go to plan.
At Rosevale Letting, we’re here to help you every step of the way. If you’d like some advice tailored to your situation or just a helping hand with providers, then get in touch with us today.
