Do flat owners need landlord liability insurance?

In the UK, two million people rent out homes to tenants, reports MoneySavingExpert.com. Hence, there can be much scope for mishaps to arise if landlords do not properly insure these homes. You might not have even realised that you should insure the home you are letting out if you don’t live there; however, especially if you own a flat, insurance can be risky to overlook.

How landlord insurance can provide a financial cushion

Though someone else might be living in that flat which may contain few items even belonging to you, this does not strictly take away from the wisdom of opting for landlord liability insurance. After all, the flat is still technically yours; in this situation, the flat’s owner and its resident are two different people. Therefore, the responsibility falls on you to take out insurance for the flat.

Landlord liability insurance is not legally compulsory for landlords. It can, however, prove very useful in practice, as you can simply never be certain when a financially costly disaster could strike. For instance, if there is a burst pipe or fire in the flat, you – rather than the tenant – would likely need to pay for the damage to be repaired. A burst pipe could require thousands of pounds to repair, while the damage could be especially serious if fire engulfs the pad.

Home sweet home insurance? Not quite…

You might initially consider taking out a standard home insurance policy for that flat. However, landlord liability insurance is actually its own form of insurance for which traditional home insurance would be no substitute. This is because, as far as insurers are concerned, someone else living in your flat can pose very different risks to you living there instead. Insurers may hike up premiums if, for example, two partying young students reside there instead of an elderly professional couple.

Are there special implications for flat insurance?

If it is specifically a flat for which you seek insurance, you may need block of flats insurance, as This is MONEY.co.uk calls it. However, it would be the freeholder of the block of flats who needs to sort this – and that person might not necessarily be you, who may hold just a leasehold property in that block.

In this situation, you could rent out the flat and learn that the freeholder has buildings insurance which ought to cover you should, for example, a washing machine leak and ruin both the floor and the below flat’s ceiling. However, it isn’t a foregone conclusion that this freeholder will hold comprehensive buildings insurance, so don’t forget to double-check.

Insurance can be customised to meet various needs

In the situation described above, you could still take out landlord liability insurance but cover yourself just for loss of rent should the flat become uninhabitable due to damage. If the flat is furnished, you could also add contents cover to the policy. You can easily receive a quote for such tailored landlord liability insurance from the broker Be Wiser Business Insurance.