Tuesday, February 27

Landlord Building Insurance: What Does It Cover?

Landlord building insurance covers the property’s structure in case it is damaged due to fire, flood, explosion, theft, vandalism and other risks. As a bare minimum, landlord building insurance will cover the cost to replace or repair the property and items attached to it, such as guttering.

Other permanent aspects of a building covered by landlord building insurance are:

  • The building itself
  • Windows
  • Walls
  • Gates
  • Fences
  • Yards
  • Pavements
  • Car parks
  • Permanent fixtures and fittings (e.g., light fittings, baths, fitted kitchens, tiling, fitted wardrobes)
  • Piping
  • Ducting
  • Cables
  • Wires
  • Roves

All insurance policies differ – but some can also cover boiler breakdown, pipe leaks, and even swimming pools and tennis courts.

Landlord building insurance is not mandatory by law, although some mortgage providers will demand some sort of insurance is on the property as part of the terms of the loan.

Policies will differ between “all risks” and “certain risks”. Most are “certain risks” policies that only cover the scenarios explicitly spelt out. “All risks” protect against everything except those excluded in the terms and conditions.

Certain risks generally include:

  • Fire
  • Flood
  • Escape of water
  • Lightning
  • Storm
  • Earthquake
  • Explosion
  • Civil commotion
  • Riot
  • Robbery
  • Theft
  • Malicious damage

Landlord building insurance does not necessarily cover a homeowner for public liability.

According to NimbleFins, landlord insurance coverage should also include property owners’ liability insurance. This may also be referred to as landlord liability. Still, either way, should protect against claims for injury to a tenant or visitor or damage to a neighbour’s property due to something that went wrong at the policyholder’s home. This is frequently sold together with landlord building insurance but is sometimes sold as an add-on to a policy.

Landlord building insurance

Landlord building insurance is not a legal requirement when renting out a property, but it is advised. As much as a landlord can be diligent in the upkeep of their property, things still go wrong unexpectedly, and building insurance provides peace of mind in case of an emergency.

Landlord building insurance protects a homeowner against damage to the building and anything fixed to it, extending past the landlord’s own personal home insurance, which does not cover let properties.

Any good landlord insurance package will include a building insurance clause, with providers paying out for unexpected damage to aspects such as walls, pipes, fixed flooring (but not carpets), fitted kitchens and wardrobes, bathrooms, patios, pavements, gutters, windows and doors.

Building insurance doesn’t cover anything that can be easily removed from the building, such as carpets, curtains, or other contents. If it could be reasonably taken to another property when moving, it will not be covered under building insurance and instead be classed as contents, according to the Financial Ombudsman.

Costs to repair or replace qualifying items would be covered by landlord building insurance if they were damaged by natural causes such as the weather or malicious and criminal events. Incidents usually qualifying for a building insurance payout include storm, lightning, flood, earthquake, fire, explosion, theft, robbery, malicious destruction, riot, leaks, civil commotion.

Insurers won’t honour a claim if it is clear the issue is due to negligence, general wear and tear or deterioration. It is a landlord’s responsibility to ensure a property is well-maintained, protected against damage, and complies with statutory and legal obligations.

Landlord building insurance with home emergency cover

Landlord building insurance with home emergency cover gives landlords access to a dedicated 24/7 claims line to report an urgent issue and get assistance. Sometimes this will also be made available to tenants, managing or letting agents report an emergency on the landlord’s behalf.

Under the benefit, the insurance provider will be on hand to offer advice and, if required, arrange for a contractor to be called out and deal with the issue.

The policyholder will be responsible for paying the contractor’s fees. If the damage is covered by buildings insurance, the landlord will be able to claim back the charges.

Does landlord insurance cover leaks?

Landlord insurance does generally cover leaks. The clause would usually cover water leaks from a burst pipe or water tanks. It also covers oil leaks from pipes and storage units where oil is used to heat a home and its water.

The clause would cover the cost of repairing the damage caused by a leak and the cost of investigating the leak, which could involve removing part of the building to find the cause.

If a policyholder also has public liability insurance, they would be covered for any damage done to a neighbour’s property. For example, if a burst pipe caused water to leak through flooring onto a property below.

While landlord insurance covers the initial leak, it doesn’t necessarily extend to some of the water leak implications. This could include subsidence or landslip due to escaping water, damage or wear and tear to grouting or sealant. Policies also do not kick into action if it is clear the damage could have been prevented and has occurred due to negligence.

Landlord legal cover

Landlord legal cover is an insurance policy to protect a property owner if tenants are in breach of their contract or if a legal claim is made against a landlord. It covers legal costs involved with challenging a tenant, such as taking them to court to chase up non-payment of rent.

It is not always included in basic landlord insurance but usually forms part of a more comprehensive package.

There are many nightmare scenarios where landlord legal cover may be useful, including property damage, recovery of rent arrears, trespassing and repossession. It can even cover the cost of extra accommodation if a landlord wishes to move back into the property but is unable to due to a tenant’s refusal to leave.

A landlord may not need to go straight to court, but the legal cover also pays for solicitor fees for letters and other communication to tenants, plus advice on steps to take.

Let’s take one of the biggest fears of any landlord: Non-payment of rent. Landlord legal cover will meet the cost of sending an initial warning, serving a notice of repossession, and initiating and completing court proceedings to be granted a possession order.

Landlord legal cover also protects against the landlord having to fight a legal battle initiated by the tenant or other party. For example, paying defence costs after claims, the home-owner has breached legal or statutory obligations.

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