Landlords Building Insurance
What is Landlords Building Insurance?
- Collapsed walls
- Flood damage
- Roof damage
- Window damage
- Damage caused by burst pipes or leaking water tanks
- Oil damage from an oil-fired heating system
- Boiler cover
We’ll go into these in a little more detail shortly.
As with most insurances, it’s not a legal requirement to have Landlord’s Building Insurance, but it will protect you in the event of costly damage to your property, which you would otherwise have to pay for out of your own pocket.
Buy-to-let mortgage providers will insist you have it in place when you secure your mortgage, in order to protect their investment. Our advisors are available to guide you through everything you need when securing a mortgage and you can also book a call just about Landlord’s Building Insurance.
What does Landlord’s Building Insurance cover?
You cannot get a mortgage without the buildings insurance, no lender will offer you a mortgage without it. But that’s no reason not to make sure that you’re getting the most comprehensive cover possible.
As mentioned above, this insurance really covers you for structural damage. But let’s look at what that means in more detail.
- Collapsed walls. This is likely to be an emergency issue, which a Home Emergency Insurance will ensure is made safe. Your building insurance will then come in to make sure that your walls are fully repaired and in no danger of future collapse
- Flood damage. Flood is another emergency, but it can leave a huge amount of damage to your floors and walls. Again, your building insurance will come in to take the emergency repairs further and get your property back to pre-flood conditions
- Roof damage. Storms are a nightmare for roofs and can cause damage that can result in leaks or collapse. Getting these fixed with your building insurance, as soon as possible, will prevent larger issues further down the road
- Window damage. If your windows are damaged by bad weather or your tenants are sadly the victims of criminal damage, get them fixed as soon as possible so your tenants feel safe and will prevent heat leaking out and driving up their bills!
- Leaks. They can come at any time, but you are more likely to see burst pipes in the winter, due to the freezing temperatures. Water tanks can also leak and cause a lot of water damage throughout the property, which will take some fixing
- Oil damage. Many properties use an oil-fired heating system and if that oil leaks, it can cause extensive damage.
- Boiler cover. It can be an very expensive fix if your boiler breaks down, so rather than have the stress of regular emergency repairs, get your boiler replaced at the first sign of trouble with your insurance cover
- Subsidence. This isn’t something you can prevent, but is a very worrying issue for landlords. Make sure you’re in contact with your tenants who can alert you to any telltale cracks in the walls that could be the first indication of subsidence and jump on this as soon as possible. The sooner the issue is identified, the better as it will hopefully won’t be quite as much of a fix
How is Landlord’s Building Insurance different from Home Insurance or Home Emergency Insurance?
Insurance can vary wildly and it’s important to make sure that you are getting not only the best deal for you, but that you are getting a policy that is the right fit for your property portfolio.
When you don’t live in the property, the risks are slightly different. As the residential owner, you know that you are taking care of your property to the best of your ability, but as a landlord, you can never be sure how well your property is being cared for and your access to check is limited. Therefore you should prepare for the worst and hope for the best.
The last thing you want is to invest in insurance that won’t pay when you need it to!
Landlord’s Building Insurance vs Home Insurance
As a landlord, your needs are different to that of a home-owner. You have a duty of care towards your tenants which means you have to react much more quickly to issues in the property than you would as a homeowner. You may be happy to live with some water damage until you can afford to get it fixed, but your tenant has the right to have the damage fixed as soon as possible.
The Residential Home Insurance you have on your own home will usually have a public liability clause, to cover you in the event of an accident on your property. This could be anything from flood damage reaching your neighbour’s property or your gasman tripping over a broken step.
However, this public liability element won’t extend to your tenants. Residential Home Insurance is designed to cover issues in your own home that affect guests or neighbours. Your tenant doesn’t fall into either category and therefore, if your tenant was hurt in any way by something in your rental property, Residential Home Insurance would not cover it.
Home Emergency Insurance will often provide alternative accommodation for tenants in the event of an emergency – if there is a flood, or if the boiler breaks down leaving them without heating. However, once the emergency aspect is resolved and it’s safe to return home, the alternative accommodation cover ends.
If the emergency has left damage that needs to be fixed, your Landlord’s Building Insurance will not only cover that, but will also house your tenant, if necessary, while the work is carried out.
Make sure that you are aware of what your policy covers and cover every eventuality, so that you are not digging into your own pocket to cover your tenant’s Airbnb stay while floors are ripped up and relaid!
Financial Loss and Expenses
Should your property become uninhabitable due to damage, your Rent Guarantee Insurance may not cover this, as Rent Guarantee Insurance tends to focus on losses incurred by non-paying tenants.
As well as covering the costs of fixing any damage, your Landlord’s Building Insurance will also cover the loss of rental income, so that you can keep up your mortgage repayments while the issue is resolved.
Your legal expenses would also be covered in the event you might need them. If the damage to your property has been caused by a builder or other tradesperson, who aren’t insured for any damage they might inadvertently cause, then your Landlord’s Building Insurance will cover you in pursuing legal action against them to recoup your losses.
Landlord’s Building Insurance vs Home Emergency Insurance
Home Emergency Insurance covers just that – emergencies that need to be dealt with quickly. This could be a boiler breakdown that leaves your tenant without heating or hot water, your Home Emergency Insurance cover will pay for the call out and emergency fix.
Unfortunately, that is all that HEI covers. HEI will make sure that the emergency element is dealt with and won’t deteriorate further:
- Boiler fixed so that hot water and heating is working again
- Burst pipes are fixed and all leakage stopped
- Gas and electricity is working again
- Roof damage is patched
- Pests are eradicated
- Building is made safe and secure if there is any damage to windows or doors
Many HEI policies, including ours, will also include an alternative accommodation element, so your tenants will be safely and comfortably housed until the emergency is dealt with. However, once the emergency is resolved, your HEI cover is exhausted.
Landlord’s Building Insurance will cover you for further issues caused by the emergency:
- Flood damage to flooring/carpet and walls
- Window replacement in the event the damage was extensive
- Fire damage
- Damage caused by pests and vermin
- Boiler update, if necessary to prevent future emergencies
Landlord’s Building Insurance will also cover deeper structural damage, such as collapsed walls and subsidence. While these issues could result in an emergency, as stated, HEI would only cover you up to the point of ensuring that the issue or damage won’t worsen.
Landlord’s Building Insurance will tackle the deeper issues to prevent future emergencies or worsening damage.
It’s worth noting that this cover won’t extend to damage to furnishings and tech, you would need to look to your Contents Insurance for that. It’s worth noting that your tenant will need to organise Contents Insurance, so we’d suggest you recommend that to them upon moving in.
Do I need Landlord’s Building Insurance?
The short answer is yes! It is not a legal requirement, but it is a key part of your landlord’s arsenal.
As a landlord, it is easy to fall back on only fulfilling your legal requirements:
However, while only spending money on your legal requirements will save you money in the short-term, long-term you could lose a lot of money, in the event of rent arrears, boiler breakdown or subsidence issues.
Better safe than sorry, in our opinion, so cover all of your bases!
But I already have Buildings Insurance?
If you are an accidental landlord, you might think you already have this covered. An accidental landlord is just what it sounds like – someone who became a landlord without planning to or purchasing a buy-to-let with that intention. This could be someone who inherited property and chooses to let it out rather than selling it, or it could be someone who is moving and decides to let out their previous home, rather than sell up.
In these instances, it’s possible that the property is already insured. However, it’s important to ensure that the policy is in your name (in the event of inheritance, which would void any existing insurance) and that it is the right insurance.
As we’ve covered, Landlord’s Building Insurance is different to Residential Home Insurance. If you are renting out a home that you had previously lived in, you will need to update your insurance to the landlord specific variety, or it simply won’t cover you when you need to make a claim!
What are the reasons you need it?
The short answer here is that you won’t get a mortgage without Landlord’s Building Insurance, but there is a lot more to it than that!
However, the many other reasons mostly come down to preparing for any eventuality and saving you money in the long run:
- Pay for the damage caused by emergencies. This could mean replacing flooring or plastering destroyed by flood; replacing a boiler that breaks down regularly; repairing damage done by pests or vermin and ensuring they can’t return
- Pay for structural issues. If you find that your property has developed some deeper issues, which is more likely the older the property is, your Landlord’s Building Insurance will cover you when it comes to correcting those. Which will save you a pretty penny, as structural damage and subsidence can cost a lot to resolve
- Peace of mind. You may think that you don’t need the cover – your property might be a new-build, you might really trust your tenants not to cause long term damage… But the fact is – you just don’t know what could happen. Rather than have the worry and the what ifs niggling away in the back of your mind, take out the insurance and rest easy knowing that you’re covered, no matter what
Often, landlords regret not having insurance at the moment they’d want to claim on it. Don’t let that happen to you!
What are the risks if you don’t have it?
Ultimately, the risk is on you and your savings, so only you can gauge if it’s a big risk or not. Without Landlord’s Building Insurance, your investment will always be at risk, as you will not know that:
- You are covered in the event of an emergency. Without cover, you will have to meet this cost out of your own savings and, if you don’t have enough, you’ll need to find the money to deal with it in a timely manner, as this is your responsibility as a landlord. All of this could severely drain your savings, your rental income that month, or put you in unnecessary debt
- You can provide accommodation for your tenant, if necessary. Without cover, you will have to cover the cost of accommodation yourself, on top of the cost of the emergency or long-term repairs. Depending on how long your tenant will need alternative housing, this cost could mount up hugely
- You are covered for long-term repairs. As stated above, these can be really expensive and take a while – meaning your tenant will need to be appropriately housed, or you will have to manage a void period. Again, without cover, you will be hit in the pocket and, if you don’t have the savings to cover it, you’ll need to go into the red
- You have your mortgage covered. Some policies will cover the missed rental payments while your home is inhabitable due to building work, meaning you can keep paying that mortgage and know your savings are safe
Ultimately, you are risking your property portfolio and whatever it stands for – additional income or your retirement plan – if you do not cover yourself for the worst eventuality. It’s up to you to decide if you can bear that risk or not (we would recommend not – give yourself the peace of mind of insurance and protect your pocket!)
Do I only need Landlord’s Building Insurance on an empty building?
Your property could be empty for many reasons, including a void period or you could be planning to start some renovations in the future and don’t want to rent it out beforehand. You would be wise to protect your property at this point too. While your property may be empty, with no tenants to worry about, you still have a lot of money tied up in bricks and mortar, so it’s worth your while to protect it.
You should specifically look for Unoccupied Building Insurance in this instance. As you aren’t living in it and you have no tenants in occupation, the cover will be slightly different.
You can also do your own research to find the right policy for you, as this insurance is often available for variable terms, so you can protect your property while it’s void and while renovations are in progress, ending the insurance once you or a tenant moves in (be sure to swap over to the appropriate occupied insurance!)
What are the risks of an unoccupied property?
If your property is empty and there are no tenants whose comfort and safety you need to worry about, you’re probably wondering why you’d need to spend money on Unoccupied Property Insurance.
But this is the point when your property is at its most vulnerable. An empty property draws more attention and becomes a higher risk than an occupied property:
- Burglars. Noticing your property is empty, burglars could make it a target. While there is likely nothing much to steal, they would be willing to take the risk, knowing they are unlikely to be discovered mid-theft
- Vandals. An unoccupied property is a goldmine for vandals, who can trash the place and cause untold damage with no risk of interruption.
- Squatters. If a building is sitting empty, it could draw the attention of squatters, looking for a new home. As you know, there is such a thing as ‘squatter’s rights’, which can take some time to untangle. There is also the possibility that they may not care for the property and leave a lot of damage in their wake when they finally vacate the property.
- Damage. If a pipe bursts in an unoccupied property and there’s no one there to notice… just how much damage can it do? The answer is – a lot! The flood could be extensive if there is no one there to turn the water off, then there is damage caused by water sitting for a long time on your flooring, not to mention potential damage to neighbouring buildings…
As you can see, there is a lot of risk involved with leaving your property sitting empty. You can certainly drop by regularly to make sure that everything is fine, and we heartily recommend you or a trusted family member or friend do that. After all, dropping by your empty property is fairly easy to do, as you don’t have to make arrangements with a tenant.
Discovering an issue is a shock and ultimately, you want to know you’re covered in the event that things aren’t totally ok.
What does Unoccupied Property Insurance cover?
You can usually only get Unoccupied Property Insurance if your property is unoccupied for 60 days or more. Less than this is usually covered by a standard policy, as it’s considered a void period between tenancies, rather than a building that is long-term uninhabited.
- Storm. Acts of God can hit your unoccupied property just as easily as your occupied one
- Flood. Natural disasters can strike at any time, particularly in the winter, and without someone in the property, the damage could be even more extensive – and expensive to fix!
- Fire. Accidents happen anywhere and anytime – and fire is particularly destructive
- Leakage. Pipes can burst and cause a flood or oil could leak from a heating system
- Theft. As we said above, your unoccupied property could be even more of a target for burglars, so you will definitely need to be covered for burglary and criminal damage!
- Legal fees. The removal of squatters and trespassers, as well as repairing any damage left behind can be expensive, so ensuring you are covered for that can really give you peace of mind, even if your unoccupied property becomes a target. With some policies, this may even cover personal identity theft
- Public liability. Damage caused by your property can also be covered. This could mean a falling roof tile breaking a car window or a broken step tripping up a delivery person
What doesn’t Unoccupied Property Insurance cover?
However, like all insurances, there are some caveats! Much as it’s good to know what your insurance covers, it’s also good to know what it doesn’t cover, so you can make sure you’re doing everything right!
However, like all insurances, there are some caveats! Much as it’s good to know what your insurance covers, it’s also good to know what it doesn’t cover, so you can make sure you’re doing everything right!
- Unforced entry. If your property isn’t properly secured, for example, if your doors or windows are unlocked or not properly secured, your home insurance will be void if you fall foul of thieves or squatters, as they will have technically walked right in, rather than breaking in. When you or someone you trust visits the property to check on it, make sure that all windows and doors are checked and locked before you leave!
- Major works. Be sure to read all that small print, as some insurers may not cover accidents that happen during major works. If your property is unoccupied because you are renovating or extending, it’s unlikely that your Buildings Insurance will cover damage caused by these works
- Contractors. Much like major works, your Buildings Insurance probably won’t cover any damage caused by the builders. They should be covered by their own insurance though, in case of accidents, so when organising your works, be sure to check that they have that insurance!
Frequently Asked Questions
While we’ve covered an awful lot of questions regarding Landlord’s Building insurance and how it fits into your insurance arsenal, we’re sure you still have some questions. So we’ve aimed to answer the most common ones below.
If you have a question that we haven’t covered, or you just want to talk through your options some more, be sure to book a call with us.
How much does it cost?
As will all insurances, the prices can vary depending on:
- Who you insure with. Policy prices can vary from insurer to insurer.
- How comprehensive you want your insurance to be. The more comprehensive your cover, the more you are likely to spend on it – and the more you could save in the future if there is an issue! So see it more as future-proofing than just another expense
- How much insurance you need. If you have multiple properties to protect, this will cost more than insuring just one. You are also likely to pay more for a larger property than a smaller one
- Pre-existing issues. If your property is older or has a history of issues, you may have to pay a little more to cover it, as it is seen as more of a risk to insure
On average, a no-frills policy will cost you around £150 a year, but bear in mind that the more extras you add will drive the price up. Give us a call and we can shop around for the best quote for you.
How long does Landlord’s Building Insurance last?
As with most insurance policies, Landlord’s Building Insurance will cover you for a year. You’re very unlikely to find it for a shorter period.
It will usually renew every year, but new policies and products are created all the time, so we recommend making a note in your calendar to remind you before it’s due to renew and booking in a call to see if there’s a better quote for the year ahead.
Can I cancel my Landlord’s Building Insurance?
Well, you can, but you shouldn’t!
As stated before, you won’t get a mortgage without Landlord’s Building Insurance as the lender wants to ensure their investment is protected. If you cancel your insurance or fail to renew it, you are in breach of your contract with your lender.
You can certainly cancel the renewal of your current policy if you have found a better deal elsewhere, but make sure that you don’t have a void period between one ending and the other one starting.
Ultimately, if you cancel your insurance, you are putting your investment at risk, either because you’re breaching your contract with your mortgage lender or because anything could happen to your property and you are no longer financially protected for any eventuality.
What properties are covered by Landlord’s Building Insurance?
There will be a policy for you, no matter your type of property. Some policies may only cover some types of properties, so this is something you will cover when you get a quote.
However, generally ‘standard’ properties are covered by Landlord’s Building Insurance, including:
- Terraced houses
- End terrace houses
- Semi-detached houses
- Detached houses
- Individual flats in purpose-built blocks or buildings
- Individual flats in converted buildings or houses
- Entire purpose-built buildings with multiple flats
- Entire converted buildings or houses with multiple flats
If you are in the process of converting a building, a barn for example, into a house or multiple flats, you may have to do some shopping around. So booking in with an advisor who can do that shopping around and small print for you is a great idea!
Best Landlord Buildings Insurance quotes?
So now that we’ve convinced you to make sure that you have Landlord’s Building Insurance, you’re probably itching to get a quote. Check out the best ones below.
If you have more questions that we haven’t covered here, or you’d just like to speak to a person, you can book a call with our great advisors, who’ll be able to answer your questions and get you a quote in minutes.