Although landlords are not required to have landlord’s insurance by law, you will probably find that it’s more cost effective to pay out for cover for your rental property than for the repairs to your house should it be damaged or destroyed.
It is worth noting here that if you have a buy to let mortgage on the property then your mortgage lender may insist that the building be insured in case of fire or malicious damage which is included in Landlord’s Insurance. They may also ask that the house is only let to professional tenants, i.e. anyone who is not a student or claiming housing benefit.
Landlords renting their house to students will probably find the landlord’s insurance premium costs will be higher than if they were renting to professionals because most insurance companies take the view that youngsters away from home for the first time are not going to be as careful about property as other people.
These days, landlord’s insurance policies cover everything from a tenant refusing to leave to having to pay to rehouse them after a fire, someone dying due to loose roof tile, or damage caused by a tenant.
Many landlord’s insurance policies also cover any loss of rental income due to a fire in the property, that is the rent you lost while rebuilding goes on and the cost of rehousing the tenant.
You should also make sure you’re landlord’s insurance includes legal protection that covers landlords for loss of rent if a tenant refuses to pay and can also cover the legal bills incured from getting the tenant out. But whichever insurance package you agree to every landlord's policy should include property owner's liability, which will cover anything that happens to your tenant – even as a result of your negligence.
Once you have organised your landlord’s insurance, don’t forget to let the insurance company know when a tenant moves in. If they are not informed that someone is living there when things go wrong, the insurance company may refuse to pay out on your landlord’s insurnace policy in full.