Think you’re protected? A look at common landlord insurance gaps

So, you’ve invested in a rental property, diligently found tenants, and perhaps even tidied up the garden. You’ve made sure to invest in home insurance and feel like everything is covered. That’s until you find out it doesn’t cover you as a landlord when renting your property out. 

Many landlords operate under the false assumption that their regular home insurance will simply extend to their rental. This is one of the most common, and potentially most expensive, misconceptions. 

Landlord insurance is a specialist product designed to address the unique risks associated with renting out a property. Without it, you could be facing significant financial losses from situations you never even considered.

So, let’s pull back the curtain and look at some common landlord insurance gaps you might not even know you have:

Gap 1: No protection for loss of rent

Imagine a pipe bursts, making your rental uninhabitable for months while repairs are carried out. Without tenants, that’s months of lost rental income, which will most definitely have a negative impact on your cash flow and potentially even your mortgage payment. 

So, what’s the solution? A landlord insurance policy that includes coverage for rent loss, as this will ensure you’re reimbursed if your property becomes uninhabitable as a result of an insured event, such as fire, flood or significant damage. 

Gap 2: Inadequate public liability coverage

If a tenant or a visitor slips on a loose step, trips over a raised paving stone, or is injured due to a faulty fixture in your rental property, you could be held liable for their injuries. Personal liability on a standard home policy is usually limited and may not extend to incidents occurring within a rental property context.

Landlord insurance includes property owners’ liability, which covers legal costs and compensation payouts when a third party is injured or if the property is damaged as a result of something related to your rental property.

Gap 3: Damage caused by tenants

While you hope for responsible tenants, accidents happen, and unfortunately, intentional damage isn’t unheard of. Your standard home insurance won’t cover damage directly caused by your tenants, whether accidental or malicious.

In order to combat this, look for landlord insurance that covers malicious damage by tenants or accidental damage by tenants. This will offer you a safety net for events like this. 

Gap 4: Coverage for furnishings and appliances (if applicable)

Standard home insurance won’t protect your white goods, such as a fridge or washing machine, from damage or theft if you decide to include this in your rental lease.

Landlord insurance can also include contents insurance, which specifically covers items that belong to you or are provided to tenants. This will be different to the tenant’s own contents insurance. 

Gap 5: Legal expenses for tenant disputes

Eviction can be a complex, time-consuming, and expensive process. Disagreements over rent arrears, property damage, or breaches of tenancy agreements can quickly escalate, leading to significant legal fees.

Many landlord insurance policies offer an optional add-on for legal expenses coverage. This can cover the costs associated with pursuing eviction, recovering unpaid rent, or defending against legal action from a tenant.

Gap 6: No coverage for unoccupied periods

If your property is empty between tenants or undergoing extensive renovations, it can be at a higher risk of vandalism, theft, or unforeseen damage. Standard home insurance policies often have strict clauses about how long a property can be vacant before coverage is voided.

While landlord insurance generally has more flexible unoccupied property clauses than standard home insurance, it’s crucial to inform your insurer about any extended vacant periods. Some policies offer specific unoccupied property insurance or endorsements to ensure continuous cover.

Review your coverage

Operating a rental property comes with unique risks that a standard home insurance policy simply isn’t designed to handle. Taking the time to understand these common gaps and securing a dedicated landlord insurance policy is an essential part of responsible property management.

If you own a property that you rent out, you’ll need landlord insurance. Relying on a standard homeowner’s policy is a dangerous gamble that could leave you financially devastated in the event of a major claim. 

Contact CIA Landlords today for your next quote on 01788 818 670!