Landlord insurance is a smart investment for property owners. One of the key benefits is peace of mind. While most tenants are honest and responsible, accidents—whether caused by a natural disaster or a simple mishap—can happen. Without insurance, landlords can be left with huge bills, legal fees, and lost income, causing significant stress.
Landlord insurance acts as a safety net, protecting you, your property, and your tenants. Plus, your insurance premiums may be tax-deductible, potentially making it more affordable in the long run.
If you decide to get landlord insurance, remember that policies vary. It’s important to compare different options carefully to ensure you choose the right coverage for your needs.
What Does Landlord Insurance Cover?
A landlord insurance policy may include some or all of the following:
Tenancy Coverage
- Damage or theft by tenants or their guests
- Loss of rental income
- Rent default
- Legal expenses if you need to take tenants to court
- Liability
Building Cover
Building insurance protects the structure of the property, including pipes, cables, external awnings, and fixtures and fittings, in cases of:
- Fire
- Lightning strikes
- Storm damage
- Flooding
- Tree falls
- Earthquakes
- Explosions
- Vandalism
- Impact damage (e.g., from a car crash or break-in)
- Water damage
Contents Cover
If you’re renting out a furnished property, contents insurance can protect against theft or damage to items like furniture, appliances, carpets, curtains, and light fittings in the event of:
- Fire
- Lightning strikes
- Storm damage
- Flooding
- Tree falls
- Earthquakes
- Explosions
- Vandalism
- Impact damage (e.g., from a car crash or break-in)
- Water damage
What Isn’t Covered by Landlord Insurance?
While landlord insurance offers valuable protection, it doesn’t cover everything. Common exclusions include:
- Tenant repairs (work done by tenants that results in damage to the property or contents)
- General wear and tear (e.g., mould damage or peeling paint)
- Building defects
- Tenant belongings
- Market conditions
- Routine expenses (e.g., lawn mowing services or plumber bills for basic maintenance)
Do You Need Landlord Insurance?
Although not legally required, landlord insurance is a wise investment for peace of mind. Accidents happen, and without insurance, you could face costly liability claims or property repairs if your property is damaged or a tenant is injured.
As a landlord, you also face the risk of tenants defaulting on rent due to personal or financial difficulties. This loss of income can affect your finances, but landlord insurance can help cover the gap.
Even reliable tenants can make mistakes. Landlord insurance reduces risks for both parties and helps alleviate emotional and financial stress during the tenancy.