Is It Worth Getting Landlords Insurance?


Buying a property and letting it out to tenants is one of the smartest and most effective ways of improving your financial situation.

On the one hand, it will provide with a regular income if the rental figure is higher than the mortgage repayments and any other associated outgoings. However, the real benefit is that you own a property which increases in value over the years while not having to pay the mortgage for it.

This is a technique which many people now use in order to prepare themselves for a happier and more financially stable retirement. Having said that, there are some issues you need to consider before you can say that you are fully prepared to make this investment work for you. One of the big issues is around landlord insurance. So, what is this and is it worth getting it?

What It Covers

To understand whether or not this type of cover is worthy getting, we must first of all understand what it covers. Just as you take out buildings and contents insurance for the property you live in, so you do the same to protect somewhere you let out to tenants. It isn’t all that different from the type of insurance you probably have on your own house. It can be taken out purely on the buildings, which is normally a requirement for getting a mortgage on the house. It can also cover just the contents or else the contents and the buildings combined on one policy.

The Most Common Questions

Of course, the fact that a rental property is different from one where the owner lives in it means that there are some common questions asked about this type of insurance cover. For example, you might wonder what happens to the cover if the place is standing empty for a while because you are looking for a new tenant. Another common area of doubt is around the case of a tenant who might be considered high risk for certain types of insurance because of their occupation or lifestyle. The good news is that certain insurers and products will cover the property regardless of who the tenant is and even when the house is unoccupied.  Another point worth bearing in mind is that a good policy like this will provide cover for you if you lose out on rental income due to an incident which is covered.

So, Is It Worth Getting It?

Having considered what landlords insurance is and a couple of the most common questions, we now need to think about whether it is worth getting this cover. The first point to bear in mind here is that if you are going to be buying a property to rent out with a mortgage then you will almost certainly be asked to take out at least buildings insurance. This will protect the bank’s investment and it will also protect yours at the same time. Even if you don’t need to get the place insured because of a mortgage it is well worth doing it in order to avoid any sort of problem affecting the investment you have made. As with any type of insurance, you might never use it. However, if you can afford to pay the premiums then it will do a great job in giving you piece of mind. If the worst comes to the worst and something really bad happens to the property then having this cover will ensure that your financial plans aren’t ruined due to a bit of bad luck.

Two other big considerations are that of a loss of rent and also insuring the property when it is unoccupied, two very real problems for landlords. If you can combine these risks with a buildings insurance policy at a competitive rate then I’d say that landlords insurance is definitely worth serious consideration.

2 Responses to Is It Worth Getting Landlords Insurance?

  1. Kathy says:

    I have never heard of landlord’s insurance. I have insurance on all my rental properties as well as a large umbrella policy for liability. I’m in the process of liquidating my rental properties but if I planned to keep them, I’d check into this type of insurance.

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