Is Buildings Insurance a Legal Requirement for Landlords?

Dealing with damage to your property can be one of the most frustrating parts of being a landlord. The best way to protect yourself against this is by investing in buildings insurance.

However, is buildings insurance a legal requirement for landlords, why is it important and what other considerations are there for landlords?

Understanding landlord buildings insurance

As a landlord, it’s important to have landlord buildings insurance. Buildings insurance can cover the cost of repairing or rebuilding your property in the event of unforeseen events causing damage from fire, explosion, flooding to storms, structural integrity issues such as subsidence and a range of other specified perils..

This might sound similar to regular home buildings insurance, because it is. However, what’s the difference? Home insurance is a domestic policy covering a private home or flat and can comprise of buildings and contents insurance, whilst landlords insurance refers to a business insurance covering a property that is let out. This could be for domestic or commercial purposes.

Is landlord buildings insurance a legal requirement?

If you own property, buildings insurance isn’t a legal requirement, but it is usually required by your mortgage lender to protect the building overall including the mortgage loaned. In these circumstances it becomes a contractual requirement. Failure to meet the terms of a contract is enforceable under contract law.

If you own a freehold property without a mortgage, buildings insurance is optional but recommended. It can cover repair or rebuild costs if your property is damaged or destroyed. This could be crucial for giving you peace of mind and protecting your financial investment.

Why is landlords buildings insurance important?

With landlord buildings insurance, you can rest easier knowing your property is protected. It is essential after a fire, flood or even vandalism, as cleaning up, fixing and rebuilding costs add up quickly.

If damage to your property means your tenant has to move out and you don't have the funds to repair it quickly enough, it’s possible that this could cause financial stress. If the right cover is included in your landlord buildings insurance, you can get the help you need so your tenant can move back in as soon as possible. Ask your insurance adviser about loss of rent and temporary accommodation cover extensions.

What can landlords buildings insurance cover?

• Fire: Your cover may help you rebuild or repair your property after fire damage.
• Storm or flood: If heavy wind and rain or flooding causes damage, your cover may assist in repairs.
• Subsidence: Your insurance policy could be crucial if your property sinks into the ground and is damaged as a result.
• Accidental damage: Your insurance can also cover you in the event of an accident that damages your property – such as putting your foot accidentally through a ceiling whilst in a loft.
• Malicious damage: This cover can protect you if your property is vandalised. Many policies provide options to include damage caused by tenants.
• Theft: Your insurance could cover you if your property is damaged during an attempted robbery.

Considerations for property owners

There’s never a good time for something to go wrong with your property. However, with the right insurance in place, you can help to limit the financial loss. There are some things to keep in mind when it comes to choosing the right buildings insurance policy.

The most suitable policy is based upon a combination of cover, limitations, service, insurer security and price. Insurers have security ratings, and that’s where ‘trust’ and service comes into consideration.

• Cover restrictions and limitations: Make sure you fully understand the restrictions and limitations of your policy and that this does not cause an issue for what you need it for.
• Price Look for competitive prices to get the best quote you can.
• Trust: Look at reviews of the insurance provider to see if they are trusted by other people.
• Benefits: Make sure you know what is and isn’t included in your policy.
• Additions: Browse the extras you can add on to your policy, as there might be some that are perfectly tailored to your needs.

Landlords insurance from Towergate

Buildings insurance can be extremely important to you as a landlord. It could end up helping you in a major way in the event of fire, vandalism or extreme weather.

Get a landlords insurance quote from Towergate

Buildings insurance is a core part of our landlords insurance policies – and you can get a quote either online or by calling our experts on 0330 828 0108.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a Fellow member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.

This is a marketing article by Towergate Insurance. Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.