Why is Landlord Insurance More Than Normal Home Insurance?
If you’re in the property game you will have noticed the large price difference between landlord insurance and those for owner-occupied properties.
The Devil is in the Landlord Insurance Detail
On first inspection both look similar and offer ‘buildings and contents’ cover should there be a fire or burglary. So why is landlord insurance often up to 20% more?
Trawl around in the policy detail and it becomes clear why. Most landlord insurance offers liability cover for two additional types of claim, both of which can be expensive. Firstly, the landlord needs to be insured in case a tenant injures themselves in the property – for example a shelf falls down and hits someone. Secondly, there’s cover against claims by tradespeople who hurt themselves while working in your property, so for example if they fall off a loft ladder.
Specific Protections for Landlords
Also, most landlord policies offer protection against lost income should the property become uninhabitable following an event such as a fire, flooding or more mundane problems such as a heating system that breaks down completely in winter and the tenants have to move out.
But there is a final factor in the price difference which is less proven. This is the likelihood that insurance companies believe tenants treat their rented homes less well than owner-occupiers and therefore are a greater ‘risk’ and, consequently, more likely to damage a property and generate claims.
But what none of these landlord insurance offer as standard is protection against tenant who stop paying the rent. To insure against this Upad offers Rent Protection (only £140) which covers a landlord against defaulting tenants for up to 12 months and £50,000.