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Should I get buy-to-let home insurance?

Should I get buy-to-let home insurance?
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There isn’t a legal requirement for you, as a landlord, to take out buy-to-let home insurance. But while the response to a question like ‘Should I …?’ is normally a list of the pros and cons, here there’s really only one con: you’ll have to fork out for the premium. However, since having no buy-to-let insurance could cost you thousands rather than hundreds, that premium might turn out to be one of your best-ever investments.

What could possibly go wrong?

Where do we start? There are few landlords without the odd horror story to tell, and whereas you may be one of the lucky ones who never have a moment’s worry about their properties, forewarned is forearmed. After all, you wouldn’t hesitate to get the right insurance for your own home, would you?

Buy-to-let home insurance is different from ordinary home insurance. Although both cover the building against the usual risks of fire, theft, flood and so on, buy-to-let home insurance can cover a range of additional risks to protect your assets and your peace of mind. With one or more third parties involved (your tenants), there are plenty more risks it’s wise to be prepared for…

Accidental damage to buildings and contents

Anything from storm damage to the roof to a wine-stained carpet could be on the horizon, and buildings and contents cover (especially for landlords of furnished properties) will be at the heart of your buy-to-let home insurance.

Loss of rent

Rent coming in every month is very nice – except when it isn’t coming in. Tenants in arrears, for example, or the building becoming uninhabitable for a while because of a leak – there are any number of reasons why the rent stops. Include a rent guarantee and you’re covered. You can even cover yourself for the cost of putting your tenants up temporarily in alternative accommodation.

A dispute with your tenants

You wouldn’t be asking yourself ‘Should I get buy-to-let home insurance?’ if you’d ever had to evict a bad tenant. There are significant legal expenses involved in what can be a costly and drawn-out process.

Damage to a tenant or their property

If your tenant is injured at your property and it’s deemed to be your fault, you could be in for a substantial compensation claim. Likewise, if a tile falls off the roof and lands on their car, you could be liable for the damage. Include public liability cover in your buy-to-let insurance and there won’t be severe damage to your finances as well.

Theft and malicious damage

It happens. Perhaps your tenants are unhappy about a rent increase, or you’ve had to speak to them about the way they’re treating the property. They might decide to respond in a way that doesn’t involve a friendly exchange of views. 

Before you decide

All the above risks can be insured against in a good buy-to-let home insurance policy. It’s a good idea to do plenty of research and make sure that the policy you go for covers everything you need it to.

Some landlords’ insurance is expensive, so it’s a good idea to do your homework to get the best value. But be wary: when comparing insurance, make sure you’re comparing like with like. If one policy is cheaper, is it missing important cover that a more expensive policy offers?

So, should you get buy-to-let home insurance?

If the above scenarios made you shudder, then the answer is yes. Even if you think it’ll never happen, the answer is still yes. Protecting your investment and your income is vital. And you’ll be able to sleep at night.

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