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Landlord insurance vs home insurance

Landlord insurance vs home insurance

Home insurance can provide cover for a number of challenges you may face as a homeowner, including if your house burns down, if there’s a break-in and even the medical bills if someone gets hurt on your property.

However, if you decide to rent out your home, a regular home insurance policy may not be sufficient, and you may need some extra cover options designed specially for landlords. So, between landlord insurance vs home insurance, which one should you invest in?

How is landlord insurance different from home insurance?

You can typically opt for home insurance that provides two types of cover: protection for your home (the building) and your belongings in it (contents). On the other hand, landlord insurance may cover everything that your home insurance does, as well as extra protection for problems you may face as a landlord.

Landlord insurance offers three types of cover: building, contents and business. In this case, business refers to your tenant, and you will get cover for any issues or damages your tenants might cause. For example, in case of loss of rental income or legal expenses to evict a tenant, home insurance will not provide cover, but landlord insurance usually will.

What’s included in a landlord insurance policy?

Inclusions, exclusions and extras generally differ between providers. However, there are a few primary coverage areas that most landlord insurance policies cover.

  • Building and contents: As mentioned above, building and contents are subsets of the landlord insurance policy. So, you will often get cover to any damage caused to the structure of the property from fire, flooding, vandalism, theft, etc. You will also often get cover for any damages done to the possessions in the house, including carpets, curtains, kitchen appliances and furniture. 
  • Loss of rent: Landlord insurance will sometimes provide cover in case of rent loss, which includes the tenant failing to make rental payments, eviction of the tenant by court order or the death of the tenant. In most cases, you will also get cover for the fees incurred if you require legal support while evicting a tenant. 
  • Public liability: If a person trips on a tree root in the driveway or tumbles down the stairs and injures themselves in your property, landlord insurance will provide public liability cover for the medical and legal costs.
  • Damage by tenants: Tenant damage is a standard inclusion in landlord insurance policies, which provides cover if your tenant or their visitors cause accidental or malicious damage to the property. Some policies may have separate covers for malicious damage and accidents, so ensure you read the PDS document carefully.

Is there a difference between renters insurance and landlord insurance?

While landlord insurance will provide cover to any damages to the property caused by the tenant, a tenant is responsible for their own possessions, including their clothes, furniture, electrical appliances, books, and other belongings. So, if a disaster occurs, tenants often lose everything and miss out on the compensation.

If you’re a tenant, it may be worth looking into renters insurance, which is a form of contents cover for people living in rented properties. If you’re a landlord, some agents recommend making renters insurance a condition of your lease.

Is home insurance required if you already have landlord insurance?

If you take out building and contents insurance as part of your landlord insurance, you may not need an additional home insurance policy - depending on what the policy covers. But, if you only opt for tenant protection, you will not be covered if the contents inside the house are broken or stolen.

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