Do I really need landlord insurance?

Hello OpenRent community,

I have been thinking about putting landlord insurance on my property and asking for quotes from different providers, but it’s proving very difficult, hence this post to seek advice.

The situation is, I had been living in this property for 5 years+ with building + contents insurance from a major insurance company. The house had a subsidence before back in 1980s and was underpinned and no relevant accident since. After I moved in there’s no major incident, but there was a major water incident last year and I made a claim (pretty big claim) and now it’s settled. My current insurance company extended the insurance to this year and I accepted it (with higher premium). End of this month, I will rent it out to a student family (with no income for now, but will hopefully do end of this year) and I am struggling to find insurance for this situation.

My questions are:

  1. Do I acually need landlord insurance? I am about to let my current insurance company know about my rental situation and the policy will need updating. But I think they don’t like the fact that student family have no income. However, can I just stick with building + contents insurance? I am more interested in Buildings insurance, Contents insurance, Property owners’ liability, and not too bothered about Loss of rent or Rent guarantee (as I trust the student family can pay the rent). Does it mean I can just focus on the former three and get a quote from them, and just don’t say the tenants are with no income? I just think it will make things much easier.

  2. Some insurance brokers don’t seem to like the fact that the house previously had a big claim - I think SimplyBusiness was the one that didn’t like it (I called them and they told me so). Why so? The claim was settled and I would have guessed the new insurance company shouldn’t care? If my current insurance company doesn’t accept no income, is there any way then I can fix the big claim issue with SimplyBusiness and get a quote from them?

  3. Currently the house has no issue with subsidence (not visually), neither does my semi-detached neighbour have a similar issue. So I am not too bothered. But I am not entirely sure if I want to let any insurance company know about this, as otherwise they will probably slow down the insurance process, or even deny it? I contacted a specialist broker about this (e.g. Gallagher), but they never got back to me (I called their sales twice but still no follow-ups).

Do you have similar problems before? Any thoughts will be much appreciated!

BR,
Tidus

Is this a hoax posting?

Nope, but what makes you think so?

Failure to declare subsidence on an insurance policy would, if they found out, invalidate future claims.

You may be hard pressed to find an insurer to give insurance with subsidence.

They are a business. Making a claim you became a high risk customer so you will get charged more or just not given a policy .

Yes you do need landlord insurance if you are renting your property!
It does not necessarily need to include rent cover .
Why are you trusting your tenant’s will pay ?

I would read other posts regarding rent issues and people who ‘ trusted their tenants ‘
Don’t believe everything you hear.
Do you have a guarantor?
You sound unfamiliar with the process.
I would get rent insurance. And an agent to manage your property.

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If you have a mortgage you do. But without a mortgage, the property is yours, and it’s entirely up to you whether you want to insure your assets.

The two alternatives to paying for insurance are self-insuring (i.e. having a hefty pile of cash to cover those major repairs for which people tend to rely on insurance claims) or b) being prepared to write off your assets if something reduces their value considerably.

The principal benefit of landlord insurance is that it covers third party claims, so covers claims by your tenant if they have an accident in your property. Its not legally required, but without it you are at risk.

If your property is mortgaged, do you have consent to let from your lender?

Thanks for the reply @A_A - I am a first-time landlord so please bear with me, and your comments are highly appreciated.

It seems you are right - I am currently struggling to find an insure for it. The thing is, when I lived in the property I didn’t think much about subsidence as I thought the house was safe (and still is), and the insurance approval process was both time-consuming and costly to go through. It wasn’t worth it. Even now I am not sure I would consider getting specliast insurance just for it.

However, subsidence aside, it seems (a) student family with no income and (a) previous big claim are also preventing me from getting landlord insurance. I am just wondering how to fix these two to get an insurer for normal landlord insurance.

I would advise that you don’t take a tenant without a guarantor.
We are in a dire economy and the best of tenants are defaulting on rent.

Rent becomes the last priority for a lot of tenants.

A student family with no income is really high risk and insurers are not going to be interested.
How are they intending on paying rent ?
I would advise you to get tenants that at least have regular income.
If they have no income how would they pay rent ?

Cia insurance are a specialist online broker for landlords. They are reasonably priced. Try them.
Make sure you get legal cover if you get a policy.
However, be aware you still may not get insurance.
We have an empty property and I was declined insurance for the first time ever just because it’s empty.
We live in odd times and insurers are not taking on high risk properties.

I don’t claim from my policies . I would only use in a worst case scenario. Some tenants make their income off landlords and solicitors advise to be wary of tactics they employ for no win no fee cases.
For that reason, as @David122 wrote, I get insurance.
My advice is to you is use a reputable estate agent in your area.

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Its the liability that makes insurance essential. If a light fitting fell on someones head causing injury you could lose everything including your own residence.
This needs covering for several million so its not just for floods etc

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Thanks for the comment @A_A - really appreciated.

Will try Cia Insurance and give it a go.

Can you elaborate on why an empty property would be decided for insurance? Can you tell us the context here?

Also noted about reputable estate agent. I do have a few and one particularly is my favourite. I was thinking more about managing the rental myself and learn along the way (and also reduce cost). But it seems you are against it?

Thanks for the comment @tatemono .

The property does come with a mortgage so insurance is a must.

Thanks @David122 .

That’s a good point. I think you are referring to the Property Owners’ Liability aspect of landlord insurance.

I have obtained the consent to let from my mortgage lender. They do ask for building insurance, hence I am seeking advice here as to how to approach my current provider and others so that I can obtain proper insurance.

I am thinking about getting back to my current provider and explaining to them about renting it out to a student family. It’s just that I need to convince them that I don’t need rent insurance aspect of landlord insurance (as the student family don’t have income anyway but gifts from parents), but I do need other aspects e.g. Buildings insurance, Contents insurance. I will probably go for Home Emergency Cover as well as an additional cover.

Do you think this approach makes sense?