Landlords are not legally required to insure their properties. However, it is financially prudent to ensure that their property is insured. Furthermore, the Landlord cannot assume that their standard household insurance will still cover their property should it be rented out. It is therefore necessary to obtain the Insurer's permission in this regard before renting out their property.
There are the following two main types of insurance that are essential to obtain prior to renting out property:
Building insurance covers the structure of the building for any loss and/or damage which is caused by the following:
It is important that the Landlord is aware of exactly what is covered by their building insurance. Where the property is mortgaged, the Mortgagor will require the owner to have building insurance in place for the property.
When taking out insurance, Landlords should ensure that the property is insured at the re-instatement value and not at the market value of the property. This will entail obtaining a structural survey to calculate the actual cost of rebuilding the property should it be damaged and/or destroyed.
Contents insurance covers the contents of the property. However, it does not include the contents belonging to the Tenant. Tenants should be made aware that they will require separate insurance for their contents.